GAIL India in talks to buy US gas from Freeport LNG plant

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GAIL India Ltd, the nation’s biggest natural gas distributor, is in talks to buy the fuel from Freeport LNG Development LP’s proposed plant in the US, a person with direct knowledge of the matter said.

The state-run company has held talks with Macquarie Group Ltd, Freeport LNG’s partner in the plant, and may buy the gas at prices linked to Henry Hub, a US benchmark, the person said on condition of anonymity.

GAIL is negotiating its second LNG supply contract from the US, where a surge in shale gas output has led to increased availability of the fuel for export. The New Delhi-based company reached an agreement with Cheniere Energy Partners LP in December and is seeking supplies from the 13.2 million metric tonne a year of the fuel that Freeport LNG plans to export from a plant due to start in 2016.

GAIL expects to sign a deal with Macquarie within a month to buy two million tonne of the fuel annually for 20 years, the Wall Street Journal reported on Monday.