Gail India (Gail) plans to buy around 10-12 LNG cargoes or around 0.9 million tonne from the spot market to meet its target of 2 million tonnes of gas supply for the financial year ending March 2015. Lower domestic demand from fertiliser and power plants has eased the supply pressure this year.

It recently tied up 18 cargoes from GNF and GDF of Europer with 12 cargoes coming from Gas Natural Fenosa (GNF) of Spain and 6 from Gaz de France (GDF). Besides, the company plans to purchase on its own around 10 to 12 cargoes from the spot market.

Prabhat Singh, director, marketing of Gail, told Financial Chronicle that it would buy around 10-12 cargoes from the spot market to meet its target, though there could be a shortfall of few cargoes as fertiliser companies who have not got subsidies and power firms due to better rains have curtailed few purchases,” said Singh.

Out of total supply of 2mt Gail has already imported around 12-14 cargoes that is equivalent to 1mt.

The company also has close to 5 million tonne of long term gas contract with RasGas of Qatar. It holds a 20 per cent stake in Carrizo’s Eagle Ford Shale acreage. It has a deal with Cheniere Energy Partners to buy 3.5 mtpa liquefied natural gas (LNG) from Sabine Pass Liquefaction, a subsidiary of Cheniere from 2017-18 and a 20-year sales and purchase agreement with Dominion Resources for supply of 2.3 mtpa of shale gas starting from 2017-18.

“We are also looking at time swapping mechanism to get early supplies from Sabine Pass Liquefaction as early as 2015-16 which was to start in 2017-18. We are in talks with many firms in the US and once the supplies start to come from the US we may even swap gas with Latin American and Japanese companies in case the demand in India is low,” said Singh.The price of gas supplied in India is around $14-15 per mmBtu.

“We have a strong upside from here for the availability of gas from the eastern and the western coast once the production starts from the KG fields and also the Deendayal Upadhyay fields of of GSPC the gas will flow from our pipeline. Besides there are few pipelines suggested in the north east and in Odisha on viability gap funding basis which would come up soon to cater to the growing demand,” said Singh.

Source: Hellenic Shipping News