In the largest deal ever signed by an Indian company, GAIL (India) Ltd, has entered into a $60-billion (about Rs. 3.80 lakh crore) deal with two US-based companies for bringing in close to six million tonnes of liquefied natural gas or LNG every year over a 20-year period beginning 2016-17.
GAIL, the first Asian company to buy liquefied natural gas from the US, is taking advantage of the lowest prices in 13 years to tie up LNG supplies from the US.
GAIL chairman and managing director BC Tripathi told HT that the landed price of the gas in India will be close to $12 (about Rs. 766) per million metric British thermal units (mmBtu).
The deal will help GAIL supply close to 23 million metric standard cubic metres of gas per day (mmscmd) beginning 2017 in the domestic market and benefit industries including power, fertilisers and others, currently facing acute shortage of natural gas.
GAIL has also contracted 3.5 million tonnes per annum (mtpa) of LNG from US based Cheniere Energy Partners for 20 years, said Tripathi. The second 2.3-mtpa LNG deal has been signed with Dominion Energy from the latter's LNG plant in the US.
According to industry sources, this is perhaps the cheapest LNG that has been sourced so far for the domestic market. It compares with close to $13 (Rs 829) per mmBtu that India will pay to RasGas of Qatar for buying 7.5 mtpa of LNG at a global oil price of $100.
LNG on a similar long-term contract with Gorgon project of Australia will cost $16 when at Indian port.