GAIL India Plans to Swap US LNG

GAIL India plans to swap some part of the LNG that it has contracted to import from the Sabine Pass Liquefaction with sellers close to US to save on shipping cost.

It has invited an expression of interest (EOI) for qualifying as potential counterparty to participate in GAIL’s US LNG volume transportation optimization exercise.

“In order to optimize the costs involved in long-shipping voyages from US to India, GAIL is considering to optimize the transportation of some of its US LNG volumes from Sabine Pass with interested counterparties who can take/purchase volumes from GAIL on FOB basis in US for its own consumption/marketing to its own customers in countries to which LNG trade is not prohibited by US law/sanctions,” the company said in a statement.

GAIL want the equivalent volumes to be delivered DES basis in re-gasification terminals located in India at Dahej and Dabhol.

The company has an agreement for purchase of 3.5 million tons a year of LNG from Sabine Pass on a FOB basis for 20 years. The supplies are expected to begin from the first quarter of 2018.

GAIL also has a second 20-year deal with Dominion Resources for supply of 2.3 million tons per annum. Supplies from Dominion will also commence in 2018.