State-run gas major GAIL received its first shipment of imported liquefied natural gas (LNG) at its rival Royal Dutch Shell’s Hazira terminal in Gujarat, to diversify its portfolio.
This is the first time since India started importing LNG in January 2004 that GAIL has used a privately operated terminal for landing its import cargo.
The cargo imported at Hazira came from French energy giant GDF Suez with which GAIL had in 2012 signed a term contract to buy 0.8 million tonne of LNG.
GAIL, which part-owns Petronet LNG that operates 10 mt Dahej terminal in Gujarat and operates 5 mt a year capacity Dabhol plant in Maharashtra, last weekend imported a cargo of LNG at Hazira.
The company previously imported all the LNG it bought from overseas either at Dahej or at Dabhol.
The gas was landed at Hazira as Dahej was facing a huge haulage problem, an official aware of the development said. “If our customers need gas, we are open to using Hazira more often,” the official disclosed.
GAIL, it is learnt, is also in talks with Shell for buying LNG on a short-term contract but a final decision is yet to be taken, the official said.
GAIL, to consolidate its position has been aggressively scouting for LNG the worldover to meet the nation’s growing gas demand, which is expected to grow from 58 billion cubic metres in 2012 to 220 billion cubic metres in 2020, representing a compounded annual growth rate of over 18 per cent.
In 2012, GAIL signed a pact with GDF to buy 12 cargoes or shiploads (0.8 mt) from 2013 to 2014.
GDF supplied six cargoes of LNG in 2013 beginning January and an equal number are to come in 2014. It supplies one cargo once in two months, most probably from its Yemen portfolio.
The price of LNG would be linked to prevailing oil rates.
GDF, which holds 10 per cent stake in Petronet LNG Ltd, had in November 2011 agreed to supply 9 cargoes of LNG to the nation’s largest liquefied natural gas importer (Petronet).
GAIL as well as Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Oil and Natural Gas Corp (ONGC) hold 12.5 per cent stake each in Petronet.
GAIL has been expanding its global presence to secure gas supplies. It had earlier signed a 20-year sales and purchase agreement with Sabine Pass Liquefaction LLC, a unit of Cheniere Energy Partners, USA for supply of 3.5 mt per year of LNG beginning 2017.