GAIL to begin LNG supplies from Qatar Energy next month under five-year deal

New Delhi: State-owned gas utility GAIL (India) Ltd is set to commence LNG imports from Qatar Energy Trading starting next month under a five-year contract that will see the company receiving 12 cargoes annually. The move comes as part of GAIL’s strategy to secure long-term gas supplies and meet the increasing energy demand in India.

GAIL Chairman and Managing Director Sandeep Kumar Gupta confirmed the development, stating, "Purchases under the deal will start from April." The agreement was finalized in December 2024 through a competitive LNG procurement tender for deliveries beginning in April 2025.

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Expanding LNG Procurement Portfolio

Apart from the Qatar Energy agreement, GAIL has recently entered into multiple long-term LNG procurement deals to strengthen its supply network. The company has signed a 10-year agreement with commodity trader Vitol Asia for approximately 1 million tonnes per annum (MTPA) of LNG, starting from 2026. Under this deal, Vitol will supply LNG from its global portfolio to various locations across India.

Additionally, GAIL has secured another long-term contract with the UAE’s ADNOC Gas for the supply of 0.5 MTPA of LNG from 2026 onwards, also for a period of 10 years. These agreements align with India's national objective of increasing the share of natural gas in the overall energy mix from the current 6-7 percent to 15 percent by 2030.

Broader Industry Trends

Other public sector enterprises are also taking similar measures to secure LNG supplies. Indian Oil Corporation (IOC) has signed agreements with Abu Dhabi National Oil Co. (ADNOC) LNG for 1.2 MTPA over 14 years and with TotalEnergies for 800,000 tonnes per annum over 10 years.

Gupta emphasized that GAIL is actively exploring additional medium- and long-term LNG contracts to address India’s rising downstream demand across various sectors. However, he did not disclose the pricing and commercial terms of the Qatar Energy deal.

GAIL’s LNG Portfolio and Infrastructure

GAIL currently maintains an LNG portfolio of 14 MTPA, diversified across multiple global pricing indexes. By 2030, the company plans to expand this by an additional 7-8 MTPA through long- and mid-term contracts, with 2.25 MTPA already secured.

The company also has two long-term agreements with US suppliers to procure a total of 5.8 MTPA of LNG on a Free on Board (FOB) basis. Additionally, it has a 2.5 MTPA supply contract with Germany’s Securing Energy for Europe GmbH (SEFE) on a Delivered Ex-Ship (DES) basis. While the US contracts are linked to Henry Hub prices, the SEFE contract is indexed to crude oil prices.

GAIL operates an extensive natural gas pipeline network spanning over 16,000 km across India. The company holds a dominant 70 percent share in gas transmission and over 50 percent in gas trading within the domestic market.

Pricing and Market Impact

Industry sources suggest that the Qatar Energy deal is priced at a slope of 115 percent to Henry Hub plus a fixed component of USD 5.66 per million British thermal units (mmBtu), with deliveries scheduled along India’s west coast. Comparatively, GAIL’s existing US contracts with Sabine Pass and Cove Point are priced at 115 percent of Henry Hub plus approximately USD 3 per mmBtu.

With these strategic LNG agreements, GAIL continues to strengthen India’s energy security and support the country’s transition to a gas-based economy.

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