The news organisation claims the source said Shell would supply 700,000 tonnes of LNG per year for 20 years to Gujarat from its merchant terminal in Hazira.

If true, this is surprising as Shell had said its share of the Gorgon gas had been fully committed to supplying its Baja California LNG terminal now under construction.

Gorgon operator Chevron Australia has committed most of its share to Japanese companies

Of the Gorgon partners, Esso Australia, an Exxon subsidiary, was the one rumoured to be looking for Indian customers.

Shell and Esso are each entitled to 2.5 million tonnes of Gorgon LNG per year, which is due to start shipping in 2010.

Gujarat would become Shell’s only Indian customer for LNG so far.

Reuters also reported the source as saying Shell would soon sign LNG supply contracts with Malaysia’s Petronas and Yemen-based Total SA’s.

Shell and Exxon Mobil each hold 25% of the Gorgon gas project, with Chevron owning the remaining 50%.