New Delhi: State-run Gas Authority of India Ltd (GAIL) will operate its 5-million tonne per annum (MTPA) LNG import terminal at Dabhol in Maharashtra during the monsoon season for the first time, Chairman and Managing Director (CMD) Sandeep Kumar Gupta told the press during a post-earning press conference on Tuesday. The company has completed constructing a breakwater facility that guards ships against high swells in the sea during monsoons and has applied for an all-weather terminal status for the terminal. “Our breakwater has been completed. We have applied for an all-weather terminal status with the authorities and hope to get authorisation in a week’s time. So, we will schedule LNG cargoes accordingly,” said Gupta.
GAIL used to shut its Dabhol terminal for four months from May 25 every year during monsoon.
The gas utility has received five proposals for acquisition of equity stakes in its US LNG project, said top company officials. GAIL floated a tender last month, inviting bidders to acquire upto 26 percent stake in a liquefied natural gas project in the US combined with a 15-year gas import deal. The move is in line with India’s efforts to narrow its trade surplus with the US. “We have received good response from US companies,” said GAIL’s Director (Business Development) Rajeev Kumar Singhal without sharing any more details. Bid submission for the project closed on April 28.
“At the country level, we have great appetite for US LNG (for meeting energy needs),” said the GAIL CMD. At the Henry Hub (US gas benchmark) price of USD 3.5-4/million British thermal unit (mmBtu), it makes good sense for India to import US LNG, said Gupta. Imports meet around half of India’s total natural gas consumption. India is the world’s fourth-largest buyer of LNG, with most of the supplies coming from Qatar, where gas price is benchmarked to crude oil prices. Increased LNG imports from the US would also mean diversification of pricing hubs in India’s LNG import portfolio.
“We believe there is great potential in increasing US LNG volumes… However, LNG linked to Henry Hub price of more than USD 4 per mmBtu would not compare favourably with gas indexed to Brent crude oil prices that averages USD 60-65 per barrel,” said Gupta.
He further informed that the Board of Directors of GAIL has decided on Tuesday to transfer six Geographical Areas (GAs) awarded to GAIL by the Petroleum and Natural Gas Regulatory Board (PNGRB) for development of CGD network. These six GAs are: Varanasi, Patna, Ranchi, Jamshedpur, Bhubaneshwar and Cuttack. GGL currently owns and operates 16 GAs across India. “In order to have a single entity for development of GAIL’s CGD Business and for bringing business synergy, efficiency and retail focussed business approach, the Board has recommended to transfer the 6GAs of GAIL to GGL subject to the approval of CCEA,” said Gupta.
GAIL’s CMD said that the company incurred a capital expenditure (capex) of Rs 10,512 crore in the fiscal 2024-25 and is planning to spend a similar amount in FY2025-26, with spending of Rs 3,000-4,000 crore planned for the petrochemicals segment, around Rs 3,000 crore on the pipelines segment and rest would go to other verticals, which includes Compressed Bio-Gas (CBG) and City Gas Distribution (CGD).