Lower gas prices to bump up India’s natural gas consumption by 6-7%: GAIL CMD

New Delhi: State-run GAIL (India) Limited’s Chairman and Managing Director (CMD) Sandeep Gupta said that he is expecting domestic natural gas consumption to increase by 6-7 percent in the current financial year following a contraction in the previous financial year. Addressing the media at an earnings conference on Thursday, Gupta said, “We definitely see this year to be very promising as far as the natural gas consumption is concerned.” The rise in demand will be driven by lower gas prices and the resumption of Liquefied Natural Gas (LNG) supplies from a former unit of Russia’s Gazprom, said the GAIL CMD.

According to official data, gas demand in the previous financial year (2022-23) witnessed a decline of 6 percent year-on-year at 60,311 MMSCM because of the disruption in LNG supplies and high gas prices. India meets about half of its natural gas consumption through imports.

To shore up supplies, GAIL looks towards US, Qatar & UAE

In anticipation of a rise in domestic gas consumption, GAIL is evaluating various options to shore up gas supplies to ensure availability of the fuel. Commenting on GAIL’s plan to pick up 26 percent stake in a US LNG project along with a long-term supply of gas, Gupta said that in response to the tender floated by GAIL, six companies have made offers. He added that bids are being evaluated. He also said that GAIL is looking for long-term deals with Qatar and UAE.

GAIL to get 4 LNG cargoes from former Gazprom unit

GAIL has got two LNG cargoes each in March and April and will receive four shiploads each in May and June, the GAIL CMD told the media. “Hopefully, similar volumes will be nominated for future months also,” he added. GAIL had in 2012 signed a 20-year deal with Gazprom Marketing and Singapore (GMTS) to buy 2.85 million tonnes per annum of LNG. Supplies started in 2018 and the full volume was to reach in 2023. GMTS had signed the deal on behalf of Gazprom. GMTS was moved to Gazprom Germania, now called Sefe. But in early April last year, Gazprom gave up the ownership of the German unit without giving a reason and placed parts of it under Russian sanctions. This followed the West slapping sanctions on Russia for its February 24 invasion of Ukraine. It invoked force majeure and stopped supplies to India from June 2022. Gupta said that normal supplies have resumed and hope they will continue.

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