In what can be described as a first for Gas Authority of India ltd (GAIl), the State-owned entity plans to venture into liquefied natural gas (lNG) shipping business where in the next four years, it is aiming to acquire seven to eight lNG carriers on long term charter or ownership basis for ferrying the natural resources on its own.
While in another move, GAIl is also looking at partnering with domestic entities in states like Karnataka, Kerala and Rajasthan for setting up lNG storage infrastructure, while it has already firmed up a similar kind of a project in Andhra Pradesh.
Sources privy to the development confirmed to The Pioneer that the biggest natural gas distributor is aiming to acquire seven to eight lNG carriers by 2017 and for this purpose, it would be floating expressions of interest (EOIs) for attracting global players in July this year.
As of now GAIl depends on spot cargoes whereas the lNG carriers which it plans to acquire would provide lNG transportation on delivery at doorstep basis.
GAIl has signed long term agreements for 3.5 million tonnes per annum with US based Sabine Pass liquefaction Company for receiving gas from it and shipments would start in 2017-18. The State-owned entity also has entered into a deal with Gazprom for 2.5 million tonnes a year gas supplies from 2018-19.
Chairman of GAIl, BC Tripathi recently had said that the company would import 34 lNG cargoes in 2013-14 against 12 in the previous year.
Of this, 18 cargoes have already been tied up, while remaining would be sources from spot market. The supplies would be split between the terminal in Dahej and Dabhol, he had said.
With GAIl increasingly depending on imported lNG cargoes, sources said, it was prudent on its part to go ahead and buy its own carriers.
Meanwhile, in yet another ambitious development, GAIl is planning to set up storage units for lNG in various States. While it has already firmed up setting up one such unit at Kakinada seaport, sources said there are plans to enter into similar agreements with other states like Karnataka, Kerala and Rajasthan for setting up storage utilities.
In Andhra Pradesh, GAIl and the State Government have formed a 50:50 joint venture (JV) company, AP Gas Distribution Corporation limited (APGDC). The JV, in turn, had entered into a strategic tie up with French company GDF Suez last year for establishing a floating storage and regasification unit (FSRU) at Kakinada seaport. GDF Suez is to have 26 per cent equity in the project.
The JV was formally sealed on May 14, 2013 in the presence of Tripathi and Andhra Pradesh Chief Minister N Kiran Kumar Reddy.
GAIl sources said that the idea behind setting up similar ventures in the aforementioned states is to remain prepared to receive lNG shipment as when they arrive in the country from Sabine Pass and Gazprom.