GAIL India Ltd will import about 5 million tonnes (MT) of LNG from the US next fiscal, replacing the volumes the state-owned utility buys from the spot market, a senior company official said.
GAIL has contracted 5.8 MT per annum of liquefied natural gas (LNG) from the US, some of which it has swapped – either by exchanging the gas with someone having it nearer to India or by time-swapping it.
“We expect to receive about 5 million tonnes of LNG from US next fiscal (2018-19),” the official said.
This will be used for replacing the LNG that GAIL currently buys from the spot or current market as well as on short term contracts.
“Out of our LNG buying of about 33 million standard cubic meters per day (8.25 MT per annum), only 17-18 mmscmd comes from long-term contract with RasGas of Qatar. The rest is all spot or short term contract volumes, which we hope to replace with US LNG,” he said.
The official said the company sold a “major chunk” of the US LNG via time swaps, destination swaps and shipping optimisation.
Under the time-swap deals, the company will buy LNG from international companies this year and sell equivalent amount of Henry Hub-indexed volumes during 2018-19.
Besides, to cut shipping costs, it has entered into deals to take deliveries of gas from a nearer location and in exchange given its US volumes to company closer to the origin.
