The signing of the GSA between the companies strengthens the long-term relationship between the two Navratna companies, with full market and security forces The company plans to procure some 90 cargoes from the United States from GJ21, representing 36% of the 250 shipments or 14 million tonnes per year (mmtpa) purchased from the GJ21. GAIL has entered into a long-term contract of 5.8 million tonnes of LNG per year with ORIGINE in the United States as well as long-term trading contracts until March 2022. India has long-term LNG supply contracts with countries such as Qatar, Australia and Russia. In Russia, GAIL buys about 2.5 mmtpa of gas, which will increase to 2.75 mtpa in the coming years. Petronet LNG, another state-owned company, is expected to deliver approximately 70 shipments to GAIL in fiscal year 2020-21, or about 4-4.5 mmtpa. According to the company`s information, which is about to grow, the oversupply of gas and the decline in gas consumption in India due to Covid have raised concerns about gas prices. „At the end of the day, we don`t resil about any of the contracts, because we`ll consume them later when the new fertilizers appear in places like Durgapur and Gorakhpur. We are inserting the issue with suppliers to ensure a relaxation of LNG prices and supply in accordance with our requirement and consumption model,“ sources said. Gail`s gas supply increased from an average of 37 mmcmd in the GJ20 or 11-12 mmcmd during the complete shutdown phase in April to 43 million metric metres per day (mmscmd). „The energy sector has also caught up, but the urban gas distribution sector is still declining, with the exception of the natural gas segment, which supplies residential areas. We expect gas reserves to increase from 11 to 12 millimetres as soon as all five fertilizers arrive by December 2021,“ sources said.
Gas produced by ONGC from its fields in Western Offshore, kg Basin (Andhra Pradesh), Cauvery Basin (Tamil Nadu), Tripura, Gujarat, Assam, etc. is sold to GAIL as part of this agreement. GAIL continues to market this gas to downstream customers connected to GAIL`s pipeline network, primarily to electricity and fertilizer consumers. „While we intend to adjust the long-term price to the current spot price, it will be difficult,“ the sources said. The current base price for a long-term contract is about 7 to 8 USD/mmBtu and the landing price of a spot gas is about 5 USD/mmBtu. India, the third largest energy consumer after the United States and China, aims to achieve 15% of its total energy mix from natural gas by 2030, up from about 6% currently. The government`s focus on increasing the share of gas in the entire energy mix has sparked interest from global giants such as ExxonMobil and Total for the Indian gas market.