GAIL close to signing HoA with Brunei for 1m t/y
GAIL looks close to signing a Heads of Agreement (HoA) with Brunei LNG for 1m t/y LNG over 10 years for delivery at either Dabhol or Kochi.
Nothing is confirmed but this appears to have been the aim of a visiting Indian delegation to the East Asia Summit of energy ministers held in Brunei on September 20 and 21. Led by junior oil minister RPN Singh, the Indian delegation travelled to the oil-rich Southeast Asian sultanate on September 18 and was scheduled to meet Brunei energy minister Pehin Yasmin on September 19 or September 21.
Accompanying Singh were oil secretary Girish Chaturvedi, oil joint secretary international co-operation Vivek Kumar and GAIL chairman BC Tripathi. GAIL teams have been actively talking to Brunei LNG for the past few months.
“Talks are at an advanced stage,” confirms a senior GAIL official. “We’ve travelled to Brunei for several meetings and their team has also visited us.
If all goes well, we hope to close a deal during this visit.” Brunei LNG, he adds, is finalising fresh long-term LNG contracts with customers other than its traditional buyers Japan and South Korea.
For GAIL, we hear, Brunei has quoted a long-term LNG price equivalent to 14% of Brent. But GAIL believes this is excessive and wants a 1$/mmbtu discount.
If agreement is reached, GAIL wants to begin receiving LNG from Brunei in mid-2013, either at Dabhol or Kochi both of which are slated for commissioning next year. In 2010, Brunei had 14-tcf of ‘proven gas reserves’, according to the US government’s Energy Information Administration.
Brunei LNG is promoted by the Brunei government (50%), Shell (25%) and Mitsubishi (25%) and is producing and exporting LNG since 1972.