GAIL to bring Gazprom LNG to India next month at reduced prices

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New Delhi, Apr 20: India is set to bring its first liquefied natural gas (LNG) cargo from Gazprom in May, after the Russian company and GAIL (India) agreed to bring down prices based on a new formula in the month of January. The company is also planning to bring at least 80 cargoes of US LNG during the current fiscal.
“We expect the first set of LNG from Gazprom to come in the first half of May. We have already renegotiated the prices with them using a fresh formula,” said an official close to the development. As per the contract between the two companies, GAIL will buy about 2.5 million tonnes of LNG from Gazprom on an annual basis.
This comes a few weeks after India’s first LNG cargo from the United States landed at the Dabhol regasification terminal in Maharashtra. GAIL has already signed a $32 billion supply deal with the Dominion Energy Cove Point project in Maryland and Cheniere Energy’s Sabine Pass project in Louisiana for 20 years.
“The plan is to bring 80 more cargoes during the current financial year, amounting to around 5 million tonnes (MT),” he said. Asia accounts to about 70 per cent of global LNG shipments, with India being the fastest growing market.
GAIL is already in talks with new fertiliser plants for supply of imported LNG and also trying to market it to anchor customers such as refineries, power plants and petrochemical units near its planned and existing pipelines.
The company had entered into long-term contracts to bring LNG from various markets expecting a rising demand from the power sector. However, the number of takers for LNG declined over the years due to the cheaper availability of power from sources like solar energy and led to the stranding of about 25,000 Mw of installed gas-based power plants.