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regular-article-logo Sunday, 03 March 2024

GAIL in US LNG hunt

Move an attempt to shore up supply sources to meet rising demand

Our Special Correspondent New Delhi Published 18.02.23, 01:17 AM
Supply comfort

Supply comfort

State-owned gas transporter GAIL is looking to buy up to a 26 per cent stake in an LNG project in the US in an attempt to shore up supply sources to meet rising demand.

The company has issued a tender seeking expression of interest from operators of existing liquefied natural gas liquefaction plants or proposed projects in the US that will be commissioned by 2027. Liquefaction plants convert natural gas into liquid form, enabling its seaborne transportation.

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The company is also looking to buy 1 million tonnes a year of LNG from the facility for 15 years, starting the last quarter of calendar year 2026, according to the tender document. GAIL is open to extending the contract by another 5 to 10 years. The deadline to submit the EoI is March 10.

GAIL had run into supply disruptions last year after Russia-owned Gazprom Marketing and Trading (GMTS) failed to deliver the contracted LNG because of western sanctions on Moscow over its invasion of Ukraine.

GAIL already has contracts to buy 5.8 million tonnes a year of LNG from the US and is looking for more supplies to make up for the Russian shortfall as well as the rising demand of a growing economy.

Petronet LNG Ltd — where GAIL is a promoter with a 12.5 per cent stake — had in September 2019 signed a non-binding agreement to invest $2.5billion in the US energy upstart Tellurian’s LNG project in Louisiana in return for gas supplies for 40 years.

That pact lapsed at the end of 2020 without a firm deal being signed. Petronet was to buy up to5 million tonnes per annum of LNG from Tellurian Inc’s proposed Driftwood LNG terminal for 40 years.

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