New Delhi: State-owned gas utility GAIL India Ltd Friday said it will spend over USD 1 billion in buying US shale gas assets, some of which may be in through a new gas sourcing joint venture it is discussing with French energy trader EDF Trading.
"We are in discussions with EDF to form a joint venture for sourcing of natural gas and trading in US," GAIL Chairman and Managing Director B C Tripathi told reporters here.
GAIL will tomorrow sign a MoU with EDF that may also also lead to the two firms jointly acquiring shale gas assets in North America as well as the French firm investing in downstream trading and marketing venture in India, he said.
The MoU would be signed in New York tomorrow in presence of Oil Minister M Veerappa Moily, who would be making his first overseas trip after assuming charge in late October last year.
GAIL has already has a 20 percent stake in Carrizo Oil's Eagle Shale gas assets in Texas, US and has also signed to import 3.5 million tons of liquid gas, called LNG, from Cheniere Energy's Sabine Pass shale gas project in Louisiana.
The company is looking at tying up more liquefied natural gas (LNG) from the US and would use Moily's 10-day visit to discuss with potential suppliers.
Tripathi said the venture would EDF would not just be for sourcing and trading of gas from US but also outside North America as well.
GAIL is eyeing relaxation in LNG export policy of US before tying up more gas for meeting growing energy demand back home.
Sabine Pass is the only one among the seven shale gas projects coming up in the US that has permission to export to nation with which Washington does not have Free Trade Agreement (FTA).
Tripathi said GAIL was investing over Rs 40,000 crore in laying over 3,000-km of gas pipeline in India. This month, it will commission the nation's second largest pipeline from Dabhol in Maharasthra to Bangalore via Goa.
It is tripling petrochemical plant capacity and tying up liquefied natural gas (LNG) imports to meet the yawning gap between supply and demand.
"Last year we imported 24 LNG cargoes (or shiploads). This year we have 26 cargoes already tied up. With Dabhol LNG terminal being commissioned last month we now have capacity to import more LNG," he said.
With production from domestic fields like that of Reliance Industries falling, GAIL is increasingly importing LNG to meet local demand.
First Published: Friday, February 1, 2013, 21:31