New Delhi: State-owned gas utility GAIL India Ltd Thursday said it has signed a preliminary agreement with French energy trader EDF Trading for jointly acquiring oil and gas assets in North America and trading of US gas/LNG.
The memorandum of understanding (MoU) may 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.
The MOU was signed during the visit of Oil Minister M Veerappa Moily's ongoing visit to the US, GAIL said in a press statement here.
"The advent of shale gas in the US bodes very well for the global hydrocarbon landscape and this partnership is expected to look for business opportunities in this exciting space in order to enhance the oil and gas sourcing prospects for India," it quoted Moily as saying.
GAIL 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.
The venture with 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).
GAIL Chairman and Managing Director B C Tripathi described the MoU as strategic and said the state-owned firm has extensive infrastructure in the midstream and downstream gas value chain and we are well positioned to meet the growing domestic demand in India.
"There are significant opportunities in the North American gas markets and we are pleased to be partnering with GAIL, one of the world's leading gas companies, in jointly developing this business," said John Rittenhouse, Chief Executive of EDF Trading.
EDF Trading is one of the world's leading participants in the LNG market and offers a complete range of services including supply and delivery, terminal operations, re-gasification and nominations into networks.