Public sector firm Gail wants to strengthen its liquefied natural gas (LNG) trading business as it may reduce the dependence of the company’s earnings on the uncertain transmission segment.
BC Tripathi, Chairman and Managing Director of the company said this in an analyst call. The trading segment of the company involves import of LNG cargoes into the country and then selling them in the spot market at a higher price than the contracted long-term prices.
Last year, the company sold 1.5 million tonne (mn t) of LNG to various players in the country, including power and fertiliser plants. Half of this was imported via 12 LNG cargoes containing 0.7 mn t of LNG. The firm set up an office in Singapore in order to diversify as an international gas trader.
The company wants to strengthen its presence in the trading segment as it considers it to be a high-price market which can help Gail charge a higher premium than India. The company has also contracted close to 3.8 mn t of capacity in Singapore for the next year.
Tripathi also informed that the firm would try to reduce its subsidy sharing burden further by being more of a diversified player having exposure to both downstream and upstream so that the company is not just a gas utility.
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