The Indian natural gas company Gail (India) Ltd. is offering to swap seven LNG cargoes from Dominion Energy Inc.'s Cove Point LNG export terminal, to remedy the shortage of tankers that could deliver the supplies to India, Reuters reported March 16.
Under the proposal, Gail would put the LNG coming from Cove Point up for sale on a free-on-board basis, in exchange for the receipt of the same amount of LNG to the Dahej/Hazira import terminal in India, the report said. The deal would make deliveries shorter and more efficient as the swapped cargo ideally would come from a terminal closer to India than the U.S., and the Cove Point cargo would go to a destination nearer to the U.S. than India.
The cargo swaps are for LNG deliveries scheduled for May to October, Reuters reported. The offer is an extension of a similar deal already struck with Cheniere Energy Inc.'s Sabine Pass LNG LP. Gail has 20-year contracts to purchase 5.8 million tonnes per annum of LNG from Cove Point and Sabine Pass.
Cove Point became the second U.S. LNG exporter after Sabine Pass when its first cargo, via a tanker owned by a Royal Dutch Shell PLC affiliate, left the terminal March 1.
