New Delhi: State-owned gas utility GAIL (India) Ltd has hired a liquefied natural gas (LNG) carrier from NYSE-listed Cool Company for a 14-year period to augment its transportation capability to meet India's rising gas needs.
"The time charter for the LNG carrier will commence in early 2025 and GAIL will have the option to extend the charter by two additional years beyond the firm 14-year period," the company said in a statement.
The agreement with Cool Company Ltd, a pure play LNG shipping company, is for a newbuild LNG carrier.
GAIL presently has four LNG carriers in its fleet and the one coming from CoolCo will be the fifth.
The firm will use the LNG tanker to ship more super-chilled fuel from the US, where it has contracted to buy 2.5 million tonne per annum (MTPA) of LNG from the Sabine Pass Liquefaction LLC, USA, beginning February 2018. It also has booked 2.3 MTPA of capacity in the Cove Point LNG liquefaction terminal, also in the US.
GAIL has a global LNG portfolio of around 14 MTPA and uses ships to bring that gas to India.
Last year, GAIL hired an LNG carrier from Japanese shipping company Mitsui OSK Lines. This was the second MOL Group LNG carrier serving GAIL. The first vessel, named GAIL Bhuwan, was chartered in 2021. The second vessel, taken in December 2023, was named GAIL Urja.
Commenting on the time charter agreement with CoolCo, S Bairagi, Executive Director (Marketing Shipping & International LNG) GAIL, said, "GAIL is looking forward to taking delivery of the LNG carrier as part of its ambitious plans for meeting the large and growing demand for natural gas in India."
Richard Tyrrell, CEO of CoolCo, commented, "We are delighted to announce a long-term charter with GAIL, the leading gas company in one of the highest growth markets for LNG. The leading-edge technology and best-in-class economic and environmental performance of this newbuild LNG carrier secure GAIL's ability to transport clean-burning LNG in a highly efficient and cost-effective manner for many years to come."
CoolCo is an LNG carrier pure play with a balanced portfolio of short and longer-term charters. In addition to the built-in and funded growth from two newbuilds scheduled to deliver in the second half of 2024, CoolCo's strategy includes ongoing assessment of opportunities for vessel acquisitions and potential consolidation in a fragmented market segment.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)