In the next three-four months, GAIL India would decide on whether to start shipping operation. The company plans to source seven LNG (liquid gas) shipping vessels on long-term charter hire. Alternatively, it is also mulling a proposal of outright purchase.
BC Tripathi, Chairman of the firm said after announcing the commissioning of its 5-million tonne a year liquefied natural gas (LNG) terminal at Dabhol.
The firm aims to double the capacity of the terminal to 10 million tonne per annum, or equal to Petronet’s Dahej terminal in Gujarat, in four years at an investment of Rs 3,000 crore.
Tripathi said the import terminal would serve as the gateway for entry of natural gas imported in ships to the southern and western parts of the country.
The company feels that demand for natural gas far exceeds supply and hence there is a huge market for imported gas even though it costs 3-4 times domestic fuel.
He informed that Gail’s long-term gas tie-ups are the cheapest. Imported gas now makes up 40 percent of natural gas consumption in the country. GAIL bought the gas cargo for commissioning the terminal in December at a price of $17 per unit. It has tied up 20-year liquid gas supplies from US and Spain and is also in talks with three more suppliers.