GAIL signs decade-long LNG deal with ADNOC Gas for 0.52 MMTPA from 2026

TAGS

GAIL (India) Limited has signed a landmark 10-year Sales and Purchase Agreement (SPA) with ADNOC Gas, marking a significant boost in India’s long-term energy security. The agreement is aimed at delivering up to 0.52 million metric tonnes per annum (MMTPA) of liquefied natural gas (LNG) starting in 2026. This is the first SPA signed by ADNOC Gas with an Indian company, representing a vital expansion into the Indian energy market.

Under the agreement, ADNOC Gas will deliver the LNG in six annual cargoes, sourced from its Das Island natural gas facility, which holds an impressive processing capacity of 6.0 MMTPA. This facility ranks as one of the longest-operating LNG plants still in production globally. This partnership reflects a crucial milestone for GAIL, which aims to expand its LNG portfolio in line with rising domestic demand for natural gas.

India’s Increasing Energy Needs Drive LNG Imports

India’s demand for natural gas is witnessing unprecedented growth, driven by an array of diversified sectors, according to Mr Kumar, Director of Marketing at GAIL. He noted that GAIL is aggressively expanding its term LNG agreements to meet this rising demand. He emphasized that the new agreement with ADNOC Gas aligns well with GAIL’s ambition to strengthen its existing LNG portfolio and cater to a diverse consumer base, thereby contributing to India’s energy security goals.

See also  Tata Elxsi partners with Cultos to launch innovative driver reward program

The LNG will play an essential role in India’s energy transition as the country looks to significantly increase the share of natural gas in its total energy mix. The current contribution of natural gas is about 6%, but the government has set an ambitious target to increase this to 15% by 2030. Industry reports indicate that in 2023, India ranked as the fourth-largest importer of LNG globally, with further growth anticipated over the coming decade.

Global LNG Landscape and ADNOC’s Expansion Strategy

Commenting on the deal, Rashid Khalfan Al Mazrouei, Senior Vice President of Marketing at ADNOC Gas, highlighted the company’s expanding role as a reliable provider in the global natural gas market. He mentioned that ADNOC Gas is strategically positioning itself to capture future opportunities as the global LNG demand is forecasted to rise by 15% over the next decade. He pointed to key growth drivers such as China’s industrial coal-to-gas switching initiatives and increased usage of LNG for power generation in Southern and Southeast Asia.

See also  Aramco and Sempra enhance global LNG supply with new agreement

This collaboration with GAIL not only strengthens ADNOC Gas’s presence in India but also underscores its role in catering to growing energy demands. Al Mazrouei reiterated ADNOC’s commitment to doubling its LNG production capacity in the coming years as part of its larger strategy to support the shift to lower carbon energy sources and secure a greater market share in the LNG space.

GAIL’s Role in Boosting India’s Energy Security

GAIL’s strategic investments are aligned with the country’s overarching goal of expanding its natural gas infrastructure. Over the past decade, India’s LNG regasification infrastructure has grown significantly, nearly doubling from 21 MMTPA in 2014. This development has ensured that India is better equipped to handle increased LNG imports, supporting the nation’s aspiration to transition towards cleaner fuels.

See also  Paradip Refinery : IndianOil to move ahead with $1.8bn PX/PTA project

As a Maharatna Central Public Sector Enterprise, GAIL is India’s leading player in the transmission and distribution of natural gas. With its extensive pipeline network, petrochemical processing plants, and interests in upstream oil and LNG regasification terminals, GAIL continues to play an instrumental role in enhancing India’s energy landscape. The company has also been proactive in promoting sustainable development through its initiatives in renewable energy.

Expert Opinion on the Deal’s Impact

Energy experts believe that this agreement will further solidify GAIL’s influence in the LNG sector. One analyst noted that GAIL’s proactive measures in securing long-term LNG supply contracts are crucial for ensuring that the country meets its energy requirements amid growing domestic demand. The collaboration with ADNOC Gas also highlights the importance of strategic international partnerships in safeguarding energy needs.


Discover more from Business-News-Today.com

Subscribe to get the latest posts sent to your email.

CATEGORIES
TAGS
Share This

COMMENTS

Wordpress (0)
Disqus ( )