Gail signs 10-yr deal to buy up to 0.52 mn tonnes LNG per yr with ADNOC Gas

State-owned gas utility Gail (India) Ltd on Thursday said it has signed a 10-year deal to buy up to 0.52 million tonnes per annum of liquefied natural gas (LNG) from Abu Dhabi's ADNOC Gas starting 2026.

This is the first sales and purchase agreement (SPA) that ADNOC Gas has signed with an Indian buyer.

"The LNG will be delivered in six cargoes per year from ADNOC Gas' Das Island natural gas facility, which has an LNG processing capacity of 6.0 million tonnes per annum. It is the third longest established LNG plant still in production globally," Gail said in a statement.

Sanjay Kumar, Director (Marketing), Gail said: "India is witnessing a growing demand for LNG to meet its increasing natural gas demand in a diversified sectoral pattern. Gail plans to significantly increase its term LNG portfolio in the coming years to meet this rising demand. This SPA with ADNOC Gas is a crucial step in this direction, enabling Gail to augment its existing LNG portfolio to better serve its diverse consumer base.

Rashid Khalfan Al Mazrouei, ADNOC Gas Senior Vice President, Marketing, said: "This agreement strengthens ADNOC Gas' role as a reliable and responsible global natural gas provider and reflects our ambition to capture future growth opportunities in gas demand. It also reinforces our position as a preferred partner for energy solutions in India.

Global LNG demand is expected to rise by 15 per cent over the next decade, driven by industrial coal-to-gas switching in China and the increased use of LNG for power generation across Southern and Southeast Asia.

"We are committed to more than doubling our LNG production capacity as part of our strategy to capture a larger share of the growing global demand for lower carbon intensity products like ours," he said.

In 2023, India ranked as the fourth-largest importer of LNG globally, with expectations for further growth in LNG imports over the next decade.

India aims to increase the share of natural gas in the country's total primary energy mix to 15 per cent by 2030, from about 6 per cent today.

India's LNG regasification infrastructure has also enhanced to nearly double capacity last year, rising from 21 million tonnes in 2014.