Japan's Sumitomo Corporation has entered into Memorandum of Understanding (MoU) with India's GAIL Limited to construct global cooperation with respect to natural gas and liquefied natural gas business.
Sumitomo Corporation will acquire business opportunities in natural gas and LNG, specifically covering cooperation in petrochemicals, natural gas procurement, pipelines and LNG.
Sumitomo plans to liquefy natural gas and export LNG from the Cove Point LNG terminal in Maryland, U.S. GAIL also participates in the project and each company will evenly off take LNG from the terminal through its US subsidiaries.
BC Tripathi, Chairman and Managing Director of GAIL (India) Limited, stated:
This is an important occasion for GAIL and we are happy to enter into this strategic relationship with Sumitomo with whom we are long term partners in Cove Point project. There are significant opportunities in the North American gas markets and we are pleased to be partnering with Sumitomo in jointly developing this business.
Sumitomo signed contracts to supply 800,000 mt/year to Japan's Kansai Electric and 1.4 million mt/year of LNG to Tokyo Gas from the Cove Point project for 20 years.
Three months ago GAIL signed a similar MoU with Japan's Chubu Electric Power to explore possibilities for collaboration on procuring LNG.