State-run Gas Authority of India (GAIL) is eyeing acquiring a minority stake of up to 26 per cent in liquefied natural gas (LNG) liquefaction plant in the US as well as long-term sourcing deals in a bid to create additional supply streams for the key hydrocarbon resource.

The country’s largest gas utility on Friday invited expression of interest (EoI) from interested parties for the same. The deadline to submit EoIs is March 10.

“GAIL, directly or through any of its affiliates, is exploring the opportunity to acquire up to 26 per cent equity at par from an existing LNG liquefaction plant/ project in USA or post commissioning of proposed LNG liquefaction plant/ project in USA, which is scheduled for commissioning latest by calendar year (CY) 2026 or 2027,” the EoI document floated by the company said.

Sourcing plan

Furthermore, the Maharatna company, directly or through any of its affiliates, is interested to source 1 million tonnes per annum (MTPA) LNG from the LNG liquefaction plant/ project on FOB basis for 15 years on mutually acceptable terms and conditions. The contract period for LNG supply may be extended further by 5 to 10 years on a mutual basis. The LNG supply is to commence tentatively from the last quarter of CY 2026, it added.

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The development is in line with projections about India’s growing appetite for natural gas. Experts point out that gas consumption is growing on the back of operationalisation of new city gas distribution (CGD) geographical areas (GAs), price advantage over other fuels and increased adoption of gas to comply with pollution norms.

India aims to increase its share of natural gas in the country’s energy mix from around 6 per cent at present to 15 per cent by 2030. Consequently, the government has authorised around 33,764 km of natural gas pipeline network across India with the aim to create a national gas grid and increase availability. As of September 2022, about 22,306 km of pipeline is operational.

The gross domestic production of natural gas rose from 28,672 million standard cubic meters (MSCM) in FY21 to 34,024 MSCM in FY22. India imported 30,776 MSCM LNG during FY22. At present, the country has 6 operational LNG regasification terminals with combined capacity of around 39.2 million tonnes per annum.

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