Petronet signs initial deal to buy LNG from United LNG

RK Garg, director finance, Petronet LNG says they have signed a preliminary agreement with United LNG, a US based company, with the prime objective of brining liquefied natural gas (LNG) to India.

The sale purchase agreement (SPA) is likely to be finalised by the end of this year, Garg told CNBC-TV18. "The supply could begin sometime in 2017-18. It is going to be a long-term supply agreement." Below is the verbatim transcript of his interview on CNBC-TV18 Q: Could you walk us through some of the contours of the deal in terms of the money involved etc? A: We have just concluded one preliminary agreement with a company called United LNG in US. The objective is to bring LNG to India and a final agreement has yet to be completed. It is likely that we will be able to finalize the Sale Purchase Agreement (SPA) by the end of this year and the supply could begin sometime in 2017-18. So it is in a very preliminary stage at this moment. Also read: GAIL inks deal with US co for LNG liquefaction capacity Q: Do you have any preliminary idea of what kind of pricing you could be looking at and what implications it could have on your margins as such? A: The supply is from US, so definitely the price of LNG would be linked with the Henry Hub prices in US. It is going to be a long-term supply and it is too early to talk about margins.