India and US came closer on Friday when the first liquefied natural gas (LNG) shipment from the US arrived at the Dabhol terminal of Gas Authority of India Limited (GAIL) in Maharashtra.
Union Oil Minister Dharmendra Pradhan received the first-ever shipment of 1.2 lakh tonne LNG under the 20-year long contract. He announced a Rs 700-crore investment by the newly-created Gail arm Konkan LNG to complete an under-construction breakwater facility, that on completion will make the terminal an all-weather facility.
Currently due to lack of the breakwater the Dabhol terminal can operate only eight months. It was created in 2007 by Enron Corporation which went bankrupt and abandoned the 1,200-mw power plant.
A senior GAIL official told PTI that the company will be getting 22-24 shipments per annum till the breakwater is built. Once that is done we will be handling 80-90 ships a year. GAIL had signed two, 20-year LNG supply agreements potentially worth $32 billion.
According to DIPNOTE, the official blog of US Department of State said that US diplomats including Patrick Santillo, the Minister Counselor for Commercial Affairs in US embassy in India and Craig Hall, the U.S. Consul General in Kolkata were also present on this occasion in Dabhol.
Today, @USAndIndia welcomed the first shipment of U.S. liquefied natural gas (LNG) at the Dabhol terminal south of Mumbai. The United States views #India as a key partner in promoting our shared strategic #energy security goals. https://t.co/OeC2UVy6fT pic.twitter.com/ua4RWmYWLl
— Department of State (@StateDept) March 30, 2018
The United States Department State says that Washington views India as a key partner in promoting our shared strategic energy security goals regionally and globally, and we are working closely with India to find policy and regulatory solutions to scale up investment for a diversified energy economy.
In March 2005, US Secretary of State Coldoleezza Rice said that her country was opposed to the proposed IPI gas pipeline because it would strengthen Iran and thus negatively affect the US economically. “Our views concerning Iran are very well known by this time, and we have communicated our concerns about gas pipeline cooperation,” she said.
US officials had also said that any cooperation with Iran on this project would be considered as assisting Iran’s alleged nuclear program.
After India’s virtual withdrawal from the project Iran and Pakistan signed a bilateral deal for going ahead with the project. But the project could not materialise as Pakistan also retracted from the dream project.
Three countries singed Memorandum of Understanding for the pipeline project in 1993. Under the MoU, India was supposed to receive the gas at half the price of what it was paying that time.