BG GROUP’S confirmation of a long-term deal to supply liquified natural gas (LNG) to India yesterday failed to stir markets, as the oil giant’s FTSE 100-listed shares fell more than the wider index.
The deal will see BG supply the Indian state of Gujarat with up to 2.5m tonnes a year of LNG.
The oil explorer will first supply 1.25m tonnes of LNG – starting in 2015 and for up to 20 years – potentially increasing to 2.5m tonnes after two years.
Analyst Malcolm Graham-Wood at VSA Capital yesterday praised the deal, calling it “extremely good news on every level”, although the market disagreed, and shares closed down 1.47 per cent at 1,169.5p.
“We have been active in India for more than 15 years and it is a large and important market that we understand well,” BG chief executive Chris Finlayson said yesterday.
“We expect the country to lie third among LNG importing countries by 2025, behind Japan and China,” he added.