By Oleg Vukmanovic and Nidhi Verma
MILAN/NEW DELHI, May 20 (Reuters) - India's Gail has signeda preliminary deal with Shell for the potential sale ofliquefied natural gas (LNG) supply sourced from its portfolio,made up of U.S. production, three sources with knowledge of thematter said.
Gail has also signed preliminary agreements with othercompanies, the sources said, one of whom added that the talkswith Shell were at an advanced stage.
Gail first announced plans to sell 1 million tonnes perannum (mtpa) of supply over a 5-year period in 2013 butnegotiations with buyers got bogged down over differing priceviews.
Gail held out against accepting what it saw as overly stingypremiums to the price it paid Cheniere to acquire the gas in thefirst place, according to information reported at the time.
The company has purchased 3.5 mtpa of LNG over 20 years fromU.S.-based Cheniere Energy from 2017.
It has also booked capacity to export another 2.3 mtpa atU.S.-based Dominion Energy's Cove Point liquefaction plant from2017.
Shell's offer was among the most attractive received, one ofthe three sources said.
Gail's Memorandum of Understanding with Shell was signedprior to Shell's announced $70 billion buyout of LNG heavyweightBG Group. It was not clear whether the move will lessen Shell'sappetite for additional supply.
The sources played down any impact from Shell's BG merger onits interest in the LNG supply from Gail. (Reporting by Oleg Vukmanovic; Editing by Ruth Pitchford)
