GSPC talking to Jordan Cove for 2m t/y LNG

Vol 17, PW 10 (19 Dec 13) Midstream & Downstream

GSPC LNG is in talks with promoters of the proposed Jordan Cove Energy project in the US state of Oregon to source 2m t/y LNG for its proposed Mundra LNG terminal.

According to a source close to the deal, GSPC LNG signed a non-binding ‘Term Sheet’ in November with Jordan Cove, promoted by Canadian company Veresen. But GSPC LNG doesn’t yet know how much gas it needs as it is still unclear how much capacity it wants at Mundra.

Clarity will emerge only after a third equity partner for Mundra is chosen and its LNG quota capacity negotiated. "The binding definitive agreement must be signed within six months of the ‘Term Sheet’,” adds our source.

“That's why GSPC LNG wants to finalise the third Mundra partner by end-January.” GSPC wants the Jordan deal’s terms to mirror a 20-year LNG take or pay contract signed by GAIL with Dominion's 4.6m t/y Cove Point facility in Maryland.

GSPC subsidiary GSPC LNG (50%) shares Mundra with Adani Group (25%). Reliance and BP joint venture India Gas Solutions has impressed GSPC with the breadth and depth of its market experience and is favourite to take a 25% stake as third partner at Mundra which GSPC wants to commission by 2017.

"If selected,” we hear, “IGS will book about 2.5m t/y capacity in the terminal.”