Updated January 5th, 2024 at 14:43 IST
GAIL secures 10-year LNG supply agreement with Vitol
GAIL will use cryogenic vessels to import the LNG, reverting it to its gaseous state upon arrival.
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GAIL bags LNG supply contract: GAIL, India's leading gas company, announced on Friday a decade-long agreement with Dutch energy trader Vitol to procure approximately 1 million tonnes per annum of liquefied natural gas (LNG), effective from 2026.
In a statement, GAIL elaborated that Vitol would supply LNG sourced from its international portfolio to various locations across India. LNG, a cooled form of natural gas, facilitates safe and efficient storage and transportation.
GAIL will use cryogenic vessels to import the LNG, reverting it to its gaseous state upon arrival. This gas will serve diverse sectors, including electricity generation at power plants, fertiliser production, and supplying city gas operators for vehicular and domestic use.
High reliance on gas imports
Although specific financial terms were not disclosed, GAIL's Chairman and Managing Director, Sandeep Kumar Gupta, highlighted the strategic significance of the deal in addressing India's persistent natural gas supply-demand disparity. Currently, India meets nearly half of its gas requirements through imports due to inadequate domestic production.
Russell Hardy, CEO of Vitol, acknowledged the growth potential of India's LNG market. He expressed enthusiasm about leveraging Vitol's global LNG resources to meet the escalating natural gas demand in India.
Sanjay Kumar, Director of Marketing at GAIL, underscored the company's strategic efforts to consolidate natural gas demand in India. This agreement with Vitol represents one of several ongoing negotiations GAIL is conducting with LNG suppliers to fortify its long-term supply commitments.
(With PTI inputs)
Published January 5th, 2024 at 14:43 IST