Gandhinagar, 20 March 2013

A photograph of MoU for a long term LNG contract signed between British Gas and GSPC in Gandhinagar.

BG Group said it will supply up to 2.5 million tonnes per annum (mtpa) of liquefied natural gas (LNG) to the state-owned Gujarat State Petroleum Corporation Ltd (GSPC) from 2015. BG Group said in a statement here that it will initially supply 1.25 mtpa of LNG beginning in 2015 and for up to 20 years, potentially increasing to 2.5 mtpa after two years.

GSPC will be supplied from the Group’s global LNG portfolio.

BG Group Chief Executive Chris Finlayson said that BG has been active in India for more than 15 years. “We expect the country to lie third among LNG importing countries by 2025, behind Japan and China. Our long-term agreement with GSPC adds another dimension to our global LNG portfolio with the addition of material new supplies to a fast growing market.”

In October 2012, GSPC had bought the entire 65.12 per cent BG stake in Gujarat Gas Company Ltd (GGCL), for Rs 2,464 crore at Rs 295 per share. The BG stake was acquired by Gujarat Distribution Networks Ltd, which is fully-owned by GSPC. GGCL had distribution rights of LNG mainly in south Gujarat and caters to over 3.5 lakh customers.

GSPC statement

Negotiations on the said agreement were announced in September 2011 and under the agreement, BG Group will supply GSPC up to 2.5 million tonnes per annum (MTPA_ of LNG. BG Group will initially supply 1.25 MTPA of LNG beginning in 2015 for up to 20 years and the same may increase upto 2.5 MTPS after two years.

The agreement marks a major step towards GSPC’s strategy of securing LNG on long term basis to help in bridging the increasing natural gas demand-supply deficit in Gujarat and across India. This deal shall further strengthen GSPC’s presence in the gas value chain, leveraging the transmission and distribution infrastructure of GSPC Group while serving customers across Gujarat and in next few years outside Gujarat.

Tapan Ray, Managing Director of GSPC said: “GSPC has access to firm long term regassification capacities. After commissioning of pan India pipelines by GSPC Group companies in the coming years, GSPC shall have access to key markets across India. Supplies under this agreement shall provide GSPC an opportunity to serve customers across the country and play an important role in meeting energy requirements. Our association with BG Group has always been mutually beneficial and we look forward to a continued successful collaboration.”

Chief Minister Speaks on the occasion

MoU signing moments