GAIL gears up for global gas swap by FY16

State-run GAIL (India) Ltd may be able to swap gas in the international market by 2015-16, once it starts transporting shale gas from its assets in the US.

"We expect large pipeline grids and liquefied natural gas (LNG) terminals to be in place by 2015-16, by then we can import gas from the US. If it is not in place and the Indian market is unable to absorb that much quantity of gas that we import, we would swap it in the international market," said

BC Tripathi, chairman and managing director, GAIL. The company already has presence in the US through a 20 per cent stake in Carrizo Oil's shale gas assets in Texas. It has also been looking to import 3.5 million tonnes from Cheniere Energy's shale gas asset.

Last month, GAIL had signed a memorandum of understanding with EDF Trading to jointly acquire and develop upstream oil and gas assets in North America. The state-run firm also plans to partner with large marketing companies in the US in trading and optimisation of the US gas and liquefied natural gas. It was looking to spend around $1 billion for acquiring shale gas assets in the US.

"We have already done some trading in the international market through our Singapore arm. Though the demand is there in India, we would like to swap it because gas may be available in some closer destination, the transportation costs and problems would be less. More, it also depends on the commissioning of LNG terminals that are coming up in different parts of the country," said a senior company official.

GAIL had opened its LNG trading desk in Singapore in 2011 through its subsidiary GAIL Global (Singapore), to source natural gas to meet the domestic demand. From the Singapore trading desk, the firm was looking for purchase and sale of LNG on spot and short-term basis.

During the current year, the company plans to import more than 30 LNG cargoes, of which 20 are spot. Last year, it had imported eight spot cargoes and five short-term cargoes.

This comes at a time when India's gas demand is likely to touch 473 million standard cubic meters per day (mmscmd) by 2016-17, according to projections by the petroleum and natural gas ministry.

Eyeing this demand, Indian firms are looking for more acquisitions in the overseas market. Public and private companies are also coming up with more LNG terminals across the country. The operational LNG terminals in India include Petronet LNG's 10 mt terminal at Dahej in Gujarat, Shell's 3.6 mt Hazira and Ratnagiri Gas and Power Pvt Limited's (RGPPL) 5 mt facility at Dabhol in Maharashtra, while Petronet's Kochi terminal is set to be commissioned soon.

The other projects in line include the Gujarat State Petroleum Corporation's (GSPC) and Adani group's 5 mt Mundra terminal, APM Terminal's plan at Pipavav, Indian Oil Corporation and TIDCO's Ennore LNG Terminal, GSPC's Okha terminal, Shapoorji Pallonji and Hindustan Petroleum Corporation's plans in Kodinar, the 50-mt Gangavaram terminal by Petronet and another 5-mt terminal planned by Hiranandani group at Haldia.

LOOKING OVERSEAS

• GAIL would be swapping gas in the international markets once it starts transporting shale gas from its assets in the US
• GAIL already has presence in the US through a 20-per cent stake in Eagle Shale gas assets in Texas by Carrizo Oil and has also been looking to import 3.5 million tonnes from Cheniere Energy's shale gas asset
• GAIL would also partner marketing companies in the US for trading and optimisation of US gas and liquefied natural gas