GAIL to import LNG cargo from spot market

State-run gas utility GAIL India will next month import its first liquefied natural gas (LNG) cargo from spot market in three years when it receives a shipment from Spain. 

GAIL is likely to receive the shipment at Petronet LNG's Dahej import terminal in Gujarat around November 20, a company official said.

The cargo has been contracted at a delivered price of $6.5 per million British thermal unit and after adding customs duty and regassification charges, the ex-terminal price of the gas will come to around $7.4 per mmBtu.

Industry sources said GAIL is getting the cargo from Repsol, which operates a LNG receipt facility in Spain. It may have diverted one of its previously contracted cargoes to India because of a fall in demand back home.

GAIL is one of the four state-run promoters of Petronet LNG — the nation's largest liquefied natural gas importer and had in 2006 made a direct import of two spot LNG cargoes from Algeria. Since then it has not done any direct contracting and has relied on the gas Petronet imports.

The company official said GAIL was looking at importing atleast one cargo from spot market every month and is also scouting for short to long term LNG.

It had earlier this month contracted an 80-million-cubic meter parcel from BG Group of UK but the deal fell. Petronet is now believed to be getting the same cargo at a delivered price of $5.7 per mmBtu.

The official said the delivered price of the gas after including transportation and taxes would be over $8 per mmBtu. For the BG cargo, it was paying an ex-terminal price of $6.4 per mmBtu and had even booked a slot at Dahej on November 23/25.