GAIL says LNG under new pacts to flow from 2026, get one more ship

New Delhi: State-owned gas utility GAIL (India) Limited will start importing LNG under two new contracts from 2026 and has added one more ship to transport the fuel, its Chairman Sandeep Kumar Gupta said on Wednesday.

The company had in January this year signed back-to-back deals to import liquefied natural gas (LNG). It first signed deal to import 1 million tonnes of LNG from Dutch energy trader Vitol for 10 years and then another agreement to buy 0.5 million tonne per annum of LNG from UAE's ADNOC-Gas.

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"As a leading natural gas player, your company recognises the importance of ensuring supply security. In this direction, we have signed two 10-year LNG supply agreements, starting in 2026: 1 million tonnes from Vitol Asia Pte Ltd, Singapore and 0.5 million tonnes from ADNOC Gas, UAE," he said at the company's annual general meeting.

LNG is natural gas, extracted from below the surface, that has been cooled down to liquid form for ease and safety of non-pressurised storage or transport.

GAIL will import LNG in cryogenic ships and turn it back into its gaseous state before piping it to users that may include power plants for generating electricity, fertiliser units for producing crop nutrients or city gas operators for selling to automobiles as CNG or piping to household kitchens for cooking.

India imports roughly half of its gas needs as local production is insufficient to meet demand.

GAIL operates a 5 million tonnes a year LNG import facility at Dabhol in Maharashtra and has leased space at terminals in Gujarat and Odisha. It is scouting for a 26 percent stake in a US-based LNG plant to source 1 million tonnes-a-year of LNG for 15 years.

"Additionally, GAIL's volume of 4.5 million tonnes per annum is now renewed under LNG SPA signed between Qatar Energy LNG and Petronet LNG Ltd, with supplies commencing in 2028 for a period of 20 years," he said.

GAIL has hired the long-term LNG vessel, GAIL Urja, and has entered into a 14-year time charter party agreement for a newly built LNG carrier.

"The time charter for this LNG carrier will begin in early 2025," he said, adding that GAIL's fleet of five LNG carriers will enable the company to meet the requirement of transporting contracted LNG volumes to India.

Gupta said GAIL, which is India's largest gas transportation and marketing firm, is also solidifying its position as a key player in the Indian petrochemical industry by establishing a diverse range of product offerings.

"GAIL's 500,000 tonnes PDHPP project at Usar (in Maharashtra), 60,000 poly-propylene plant at Pata (Uttar Pradesh), 1.25 million tonnes PTA plant at GMPL, Mangaluru and 50,000 tonnes Isopropyl Alcohol (IPA) Project at Usar will diversify and expand GAIL's existing petrochemical portfolio and provide robust growth in years to come," he said.

"GAIL is also exploring the feasibility of setting up a world scale greenfield ethane cracker."

It is also working on feasibility of coal gasification project in a joint venture with Coal India Ltd to produce synthetic natural gas.

Stating that GAIL was well-positioned to become a leader in the energy transition, he said the company board has approved the advancement of the net zero carbon emission target by five years from the earlier 2040 to 2035.

"Advancing its endeavours to reduce its carbon footprint, GAIL has installed the country's first MW scale green hydrogen electrolyser in Vijaipur, Madhya Pradesh," he said, adding that the firm was also working on setting up of 500 kilo litres per day 1G ethanol plant.

Additionally, the feasibility of building/expanding natural gas and LPG pipelines is also underway," he said.

"Your company intends to sustain its current momentum in infrastructure development, ensuring energy security, diversification, market expansion, and growth in renewables. GAIL is working to increase the penetration of LNG and natural gas while helping with energy transition and reducing carbon emissions."

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