UK energy major BG Group Plc's Indian arm BG India on Thursday announced it was getting into long-term gas supply agreements with Indian companies. In its first such deal, BG India said it has signed a heads of agreement (HoA) with Gujarat State Petroleum Corporation (GSPC) - a government of Gujarat company -for the long-term supply of up to 2.5 million tonnes per annum of liquified natural gas (LNG).
BG has so far been supplying LNG cargoes to India on spot basis since 2006 and has supplied 30 such cargo so far. However, following the recent massive earthquake in Japan, the dynamics of LNG supply and trade suffered a major change, thereby making global gas leaders like BG look at long term supply of LNG into energy hungry markets such as India.
Asked if more such deals are in the offing, the president and managing director of BG India, Walter Simpson told Hindustan Times that the BG group "continues to expand its LNG business in India and Asia but cannot discuss specific plans."
"This is the standalone deal that we have entered with GSPC and the LNG volumes will be sourced from the BG Group's global supply portfolio," he said.
"Our HoA with GSPC sets out the basis on which BG India proposes to sell the LNG volumes to GSPC for up to a 20-year period beginning as early as 2014," Simpson said.