(EnergyAsia, June 13 2011, Monday) — Russia’s Gazprom Global LNG (GGLNG) said its Singapore affiliate, Gazprom Marketing and Trading Singapore (GM&TS), has signed separate memoranda of understanding (MOU) for the long-term supply of liquefied natural gas (LNG) to three Indian state-owned companies, GAIL India Limited, Gujarat State Petroleum Company (GSPC) and Petronet LNG Limited.

GM&TS, a wholly-owned subsidiary of Gazprom Marketing & Trading, will supply each company a total of up to 2.5 million tonnes per year of LNG over a maximum period of 25 years. GM&TS will tap supplies from Gazprom’s global portfolio including its Sakhalin reserves and from other international sources.

GAIL is India’s largest natural gas company, with over 70% of the country’s natural gas transmission market and diverse business interests in liquefied petroleum gas (LPG) transmission, petrochemicals, city gas projects and upstream activities. GAIL has business interests in Egypt, China, Myanmar and Oman, and operates wholly-owned subsidiary GAIL Global (Singapore) Pte Ltd in Singapore.

Gazprom said its agreement with GSPC builds upon a supply deal they signed earlier this year.

Tapan Ray, GSPC managing director, said:

“Following the successful signing in January this year of a structured deal to supply 300,000 tonnes a year of LNG for the next two years, GSPC and Gazprom are exploring the possibility of building further on this mutually beneficial relation.

“This MOU represents another significant step towards building upon the already strong relation between GSPC and Gazprom. We believe securing sufficient long term LNG supplies is imperative for meeting the growing energy needs of our country.”

With Petronet, Gazprom said GM&TS has already delivered several spot cargoes to the Indian company’s Dahej LNG terminal in through third party arrangements.

A. K. Balyan, Petronet’s managing director and CEO, said:

“This MOU is a key step in diversifying our LNG supply portfolio and this relation will go a long way in developing mutually beneficial relations between the two companies.”

Petronet was jointly established by GAIL, Oil & Natural Gas Corporation Limited (ONGC), Indian Oil Corporation Limited (IOCL) and Bharat Petroleum Corporation Limited (BPCL) to import LNG and set up gas import terminals in the country.

Gazprom, which began supplying LNG to India in 2007, said India along with Japan and other North Asian countries are vital markets underpinning its international growth.

Frédéric Barnaud, GGLNG President and managing director, said:

“We are delighted that our successful partnership with GAIL, GSPC and Petronet has laid the foundations for these strategic LNG supply agreements. Thanks to our Russian LNG portfolio, we are confident GGLNG will lead the strengthening growth of the LNG markets in India and across the world.”

Nigel Kuzemko, GGLNG’s Singapore-based Global Director of LNG Development, said:

“The negotiations are on-going and the sales and purchase agreements (SPAs) are expected to be finalised over the coming months. Gazprom’s LNG marketing and trading arm has leveraged its integrated Sakhalin asset and its international trading portfolio to develop the capabilities in marketing, shipping and logistics on a global scale.”

GGLNG, which has extensive commercial activities and portfolio around the world, is focused on developing its network and Asia through Gazprom Marketing & Trading Singapore Pte Limited.

GM&T is responsible for expanding Gazprom’s downstream activities and optimising its assets around the world through local subsidiaries in Houston, Singapore, Paris, Berlin and Manchester. GM&T trades energy commodities including gas, power, oil and oil products, carbon, LNG and foreign exchange.