Gail, Sumitomo in energy MoU


Indian player Gail and Sumitomo of Japan have signed an agreement that will see the pair work together in the upstream and liquefied natural gas arenas.

The companies, which are partners in the proposed Cove Point LNG liquefaction facility in the US, will also co-operate on petrochemicals, pipelines and gas purchases under the memorandum of understanding revealed on Friday.

Gail said the deal would see the pair “pursue business opportunities in natural gas and LNG value chain business globally”.

Particular mention was made of the Cove Point plant, which received environmental clearance from the US Federal Energy Regulatory Commission (Ferc) in mid-May. Sumitomo and compatriot Tokyo Gas have committed to take 2.3 million tonnes per annum of liquefaction capacity, and India's Gail has committed to 2.3 million tpa of capacity from the facility.

“Both parties view US market as a growth area for their line of businesses and would co-operate on businesses ranging from upstream to downstream,” Gail said on Friday.

The Cove Point facility will consist of two liquefaction trains with a nameplate capacity of about 5.75 million tpa at a rate of 770 million cubic feet per day of gas. It would be built on the site of the existing Cove Point LNG import terminal on the coast of Maryland.

IHI and Kiewit have already completed front-end engineering and design for the liquefaction terminal, and hope to complete building by 2017, if Ferc approves the plans.


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