India's Petronet LNG Inks 20 Year U.S. LNG Import Deal

Leaders of the two companies signed the agreement

India's Petronet LNG Ltd. says it will buy a minimum of 4 million metric tonnes per year (mtpa) of U.S. liquefied natural gas (LNG) for 20 years under a new agreement with United LNG LP.

The fuel will come from the Main Pass Energy Hub in the Gulf of Mexico, and the state-owned Indian company is also considering buying a stake in United LNG's liquefaction facilities.

"Petronet LNG is delighted to have executed our first USA based LNG supply off take agreement and looks forward to moving ahead with United LNG and their strong JV partner Freeport-McMoRan Energy," said Director and CEO A.K. Balyan.

"As both a reliable and low cost LNG supplier, the USA is now the world's prime target to secure LNG, and this agreement with United is another big step forward to meeting India's growing demand for clean energy."

United LNG Chairman and General Partner Stephen Payne said Petronet is the project's largest single buyer and the second in the Indian Sub-Continent.

"United LNG now has supply agreements totaling 12 mtpa, which represent half of our total off take capacity," Payne said.

"At this week's LNG conference, we made significant progress negotiating with 12 potential customers on 3 continents and we expect to be fully subscribed very soon."

The Wall Street Journal reports that the transport of LNG between the parties is scheduled to start in 2017 or 2018.

The newspaper notes that the export of LNG has created political tension in the U.S., where some industries would prefer to use natural gas domestically.

Nirupama Rao, India's ambassador to the U.S., recently wrote that Indian imports of U.S. LNG could benefit both nations.