Petronet's long-term deal for Gorgon LNG

Petronet has agreed to purchase 1.5m tonnes a year from ExxonMobil under a 20-year contract, which the parties said had “the potential for additional supply”.

Lloyd's List reports that the LNG will be shipped to the Kochi terminal in southern India.

Petronet and ExxonMobil said they would continue working on binding agreements to conclude the sale and purchase agreement in June.

The parties said the commercial details were confidential.

Petronet LNG’s managing director, Prosad Dasgupta, said after finalising the agreement, the company would "move forward with the LNG infrastructure needed to supply natural gas consumers in the Kerala region”.

The Kochi terminal will have a capacity to import 2.5m tonnes of LNG a year and is expected to start operations in 2011.

Chevron is the largest shareholder of Gorgon with a 50% stake, while ExxonMobil and Royal Dutch Shell each hold 25%.

Greater Gorgon is a major offshore project in WA which now involves three 5m tonne liquefaction trains which analysts believe could cost $20bn (US$15.2bn).

The Gorgon field has potential reserves of more than 40trn cu ft.

PetroChina has already agreed deals with two Gorgon partners.

Earlier this year, PetroChina agreed to buy 2m tonnes a year from ExxonMobil for 25 years, a pact which followed a similar arrangement with Shell.