NEW DELHI: State-run GAILBSE 2.18 % will open a new energy route for India early next year by beginning regular imports of shale gas from the US, adding to New Delhi's bargaining power with its predominantly West Asian suppliers.
The gas utility will begin importing gas in ships under a long-term contract from Dominion Cove Point LNG (liquefied natural gas) project from March 2018 and has floated tender for chartering ships for transportation.
The company has also made a time-swap deal for a million tonne of US gas for 2018-19 in an attempt to recast its supply portfolio in line with domestic demand.
GAIL chairman B C Tripathi said on Monday the company initially sees US ship ments replacing spot cargoes and will charter four ships to begin with. “We bought about 55 spot cargoes totalling under four million tonne of gas in 2016. This is expected to increase and be replaced by the US shipments.“
GAIL had in 2013 tied up 2.3 million tonne LNG supplies for 20 years from Cove Point. It signed another contract for 3.5 million tonne of LNG with Cheniere Energy Inc's Sabine Pass project in Louisiana, US, the supplies from which will begin in December 2018. The company also holds a 20% stake in Eagle Ford Shale of Carrizo Oil & Gas.
The contracts with Che niere and Dominion make GAIL one of the largest holders of LNG portfolio linked to Henry Hub -the US gas price benchmark -and will allow it to market 6 million tonne of US gas. Both Cheniere and Dominion projects have US energy department's approval to export gas to countries like India that do not have free trade agreement with Washington.
Regular gas supply from the US at an affordable rate will underline the impact of a rebound in the US fracking industry on global energy trade and widens options for India, giving it leverage against West Asian suppliers.
View all SMART GRID Bulletins click here
Enter your email-id to subscribe to theSMARTGRID Bulletins
20 November 2017
21 November 2017
22 November 2017
23 November 2017
28 November 2017