India: GAIL Expecting LNG Supply from Gazprom to Start Soon

GAIL Ltd. plans to buy 0.5 million tonnes or eight cargoes of liquefied natural gas (LNG) from Russia’s Gazprom in 2018-19, according to its Chairman and Managing Director Mr. B. C. Tripathi. “The cargoes will start coming from May,” he said.

GAIL renegotiated the terms of a long-term 2.5 million tonnes per annum (mtpa) liquefied natural gas (LNG) purchase deal with Russia’s Gazprom in January. This was the third such renegotiation by India with LNG suppliers to make the imported fuel more affordable, using its position as one of the world’s biggest energy consumers to strike better bargains for its companies.

India has also renegotiated long-term LNG deals with Qatar’s RasGas and Exxon Mobil Corp as spot prices declined substantially amid a supply glut that turned trading of the seaborne gas into a buyers’ market. GAIL is planning to get as much as 5 million tonnes of LNG from the US as well, equivalent to about 80 cargoes throughout the fiscal year, Mr. Tripathi said. He said half of the US LNG cargoes could be swapped for shipments from other suppliers, depending on available terms.

“Swapping is a continuous process and we are doing it regularly. We have swapped three so far in this year,” he said, although he added that GAIL did not expect to swap any of the Gazprom cargoes this year.

Pipeline network

The much-delayed Kochi-Mangalore natural gas pipeline, which can open up a substantial latent demand in South India, will be ready by November, he informed.

The pipeline will connect Petronet LNG’s 5 million-tonne-per-year regasification terminal at Kochi to demand centres in and around Mangalore, including a refinery run by Bharat Petroleum Corp Ltd. and Managalore Refinery and Petrochemicals Ltd. and fertiliser plants.

GAIL is also working on implementing a national gas grid that is aimed at connecting the under-served eastern part of the country to the rest of the nation. “We are trying to implement a large portion of the gas grid by 2022-23. The 4,000-kms which GAIL is implementing presently should be ready by December 2022,” Mr. Tripathi said.