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Houston based Cheniere Energy has entered into a 15-year agreement with one of the world’s largest oil trader, Vitol Inc. Under the scope of this agreement, Cheniere will supply 700,000 tonnes of LNG to Vitol every year starting from 2018. Cheniere's Sabine Pass terminal in Louisiana increased its output and helped the United States come out as the major LNG exporter in the last two years.
A ship carrying super-cooled natural gas arrived at Dabhol in Maharashtra yesterday, its first LNG cargo from the US under a long term supply deal of state owned Indian firm, GAIL and US’s Cheniere Energy. In an official statement, GAIL India said the firm is one of the early movers to contract US LNG and has 5.8 million tonnes per annum of US LNG in its portfolio.
India’s GAIL which has entered into a ‘take or pay’ agreement from Cheniere’s arm, Sabine Pass (SPL) has been rebuffed when it went for a price negotiation. The contract which amounts for purchase of 182.5 trillion BTU of LNG seems to be a little problematic for the govt. owned enterprise which entered the contract to hedge prices but ended up caught under the hedge of quantity.