The PSU will begin importing gas in ships under a long-term contract from Dominion Cove Point LNG (liquefied natural gas) project from March 2018 and has floated tender...
for chartering ships for transportation.
The PSU has also made a time-swap deal for a million tonne of US gas for 2018-19 in an attempt to recast its supply portfolio in line with domestic demand.
GAIL Chairman BC Tripathi on May 22 said the PSU initially sees US shipments replacing spot cargoes and will charter four ships to begin with. "We bought about 55 spot cargoes totalling under four million tonne of gas in 2016. This is expected to increase and be replaced by the US shipments."
The Maharatna PSU posted a 57 percent rise in 2016-17 net profit at Rs 3,503 crore, mainly due to turnaround in petrochemical business, higher profits from gas transmission business and partial sale of stake in Mahanagar GL," he said.
GAIL had in 2013 tied up 2.3 million tonne LNG supplies for 20 years from Cove Point. It signed another contract for 3.5 million tonne of LNG with Cheniere Energy Inc's Sabine Pass project in Louisiana, the supplies from which will begin in December 2018. In The company also holds a 20% stake in Eagle Ford Shale of Carrizo Oil & Gas.
These contracts will make GAIL one of the largest holders of LNG portfolio linked to Henry Hub -- the US gas price benchmark -- and will allow it to market six million tonne of US gas. Both Cheniere and Dominion projects have US energy department's nod to export gas to countries such as India that do not have free trade agreement with Washington.
Regular gas supply from the US at an affordable rate will underline the impact of a rebound in the US fracking industry on global energy trade and widens options for India, giving it leverage against West Asian suppliers.
GAIL is the largest state-owned natural gas processing and distribution company.