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Gail signs deal with Vitol to secure 1 mn MT of LNG annually for 10 years

The deal is significant as it is the first of a series of agreements being pursued by Gail to diversify its imports beyond Qatar, aiming to avoid disruption in supplies

GAIL

Subhayan Chakraborty New Delhi

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State-owned Gail (India) Limited has signed a long-term deal with Vitol Asia Private Ltd to secure one million metric tonnes of Liquefied Natural Gas (LNG) annually for 10 years. Set to take effect from 2026, the deal will see Vitol deliver from its global LNG portfolio to Gail on a pan-India basis.

The deal is significant as it is the first of a series of agreements being pursued by Gail to diversify its imports beyond Qatar, aiming to avoid disruption in supplies. Vitol is a Switzerland-based, Dutch multinational energy and commodity trading company.

"This long-term LNG deal with Vitol will augment Gail's large LNG portfolio and will contribute to bridging India’s demand and supply gap of natural gas," Gail Chairman and Managing Director Sandeep Kumar Gupta said.

“We are pleased to build on the existing relationship between Vitol and Gail and to conclude this long-term LNG supply deal together. India is a significant and growing LNG market, and we are excited to bring LNG supply from our global LNG portfolio to meet this rising natural gas demand in India," Vitol CEO Russell Hardy said.

Gail officials said the deal is necessitated by the demand for natural gas in India getting consolidated. This LNG tie-up is part of multiple negotiations which Gail has been carrying out with various LNG suppliers for long-term deals, Gail Director of Marketing Sanjay Kumar said.

Vitol is a leader in the energy sector with a presence across the spectrum: from oil and gas to power, renewables, and carbon. It trades 7.4 million barrels per day of crude oil and products, and charters 6,000 sea voyages every year.

Gail owns and operates a network of over 16,000 km of natural gas pipelines on a pan-India basis and is working concurrently on the execution of multiple pipeline projects to further enhance the spread. The company commands around 70 per cent market share in gas transmission and has a gas trading share of over 50 per cent in India. Gail and its subsidiaries and joint ventures also have a formidable market share in City Gas Distribution.

Vitol serves clients from about 40 offices worldwide and is invested in energy assets globally, including 17 million cubic metres of storage globally, approximately 500,000 barrels per day of refining capacity, over 7,000 service stations, and a growing portfolio of transitional and renewable energy assets.

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First Published: Jan 05 2024 | 4:21 PM IST

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