State-owned gas utility firm, GAIL India Ltd, has joined the race with world’s leading LNG suppliers and traders like Gazprom, BP Gas, Chevron, BG Group, Total, GDF Suez, Macquarie and Petrobras to set up a LNG trading desk in Singapore, a first of its kind by any Indian oil and gas company so far.
The plans to have a LNG trading facility in Singapore will help GAIL take advantage of Singapore’s favourable tax structure as India has a double tax avoidance agreement with the island nation.
The move will also help the energy starved India get access to desired quantities of LNG to meet its growing domestic demand of gas. Company’s chairman and managing director, BC Tripathi, is in Singapore on a three-day visit to kick start the LNG trading activities of GAIL, beginning Wednesday.
With India’s domestic natural gas production — currently at about 120 mmscmd (million standard cubic feet per day) — much less than the existing demand of around 189 mmscmd , the country is already importing 46.3 mmscmd gas as LNG. Even after these imports, the total availability of 164 mmscmd is short of current demand of 189 mmscmd.
(The writer’s travel and stay were sponsored by the Energy Market Authority of Singapore)