Indian Gail Signs LNG Swap Deals
Indian Gail has signed three time swap deals whereby LNG volumes are purchased from international parties during financial year 2017-18 (April-March) in return for selling equivalent volumes during the following 2018-19 year, it said in its 2016-17 annual report, without naming counterparties.
The move is part of Gail’s effort to de-risk its exposure of LNG contracted from the US.
Gail has two US LNG deals. One with Sabine Pass Liquefaction for 3.5mn mt/yr from Sabine Pass terminal in Louisiana, supplies from which are to start March 2018. It also has a terminal service agreement for booking of 2.3mn mt/yr liquefaction capacity in the Cove Point LNG liquefaction terminal, with supplies to commence December 2017.
The company is also working on exploiting the current low-price charter rates in the shipping market in order to put in place a swap contract concept for reducing charter rates to India from the upcoming volumes from USA, in the hope of ensuring competitive LNG deliveries for Indian consumers.
In the Indian market, Gail executed a non-binding tolling term sheet with Dhamra LNG Terminal to book 1.5mn mt/yr of regas capacity at the proposed LNG terminal at Dhamra in the eastern Indian state of Odisha. It is also exploring the possibility of taking an equity stake in the terminal.
Gail is India’s biggest gas marketer and owns and operates a network of about 11,000 km of high-pressure natural gas trunklines with a pan-India throughput capacity of around 206mn m3/d (75.2bn m3/yr). Average gas transmission during the year 2016-17 was 100.38mn m3/d (36.6bn m3/yr), up from 92.09mn m3/d in the previous financial year. The share of third party transmission was 22.18mn m3/d (8.1bn m3/yr).
Gail also directly imports LNG through carriers from various suppliers worldwide and gets it regasified either at Petronet LNG’s regasification terminal at Dahej, Gujarat or at Ratnagiri Gas and Power’s regasification terminal at Dabhol, Maharashtra.
Shardul Sharma