The Hindu Business Line : GAIL sells entire quantity of LNG spot cargo bought from Algeria

GAIL (India) Ltd has claimed that it has sold out the entire quantity of the first ever liquefied natural gas (LNG) spot cargo bought by the company from Algeria. The LNG, equivalent to 80 million standard cubic metre (MMSCM) of natural gas, was sold to consumers such as NTPC, Delhi Vidyut Board, and Birla Copper, the company said in a statement issued here.

On May 9 GAIL had made purchases of LNG cargo from the international market on its own. The company had bought one spot cargo of 1,35,000 standard cubic metres from Algeria. GAIL had planned to sell part of the LNG to companies facing natural gas supply crunch. High on the list were power generation companies who are facing serious supply shortages in Northern India.

Currently, the domestic price of naphtha is as high as $20 per million British thermal unit equivalent of energy. The price of Algerian LNG will be a fraction of this price, the company said. GAIL is confident of importing more spot cargos in the near future and is in touch with LNG sellers in the Pacific Basin, Atlantic Basin and the West East for future imports, it added.

According to market sources, this is the most expensive LNG till date. The cargo was bought at an ex-shipment price of about $9.28 per million metric British thermal unit (mmBtu). After adding various taxes and other costs, it translates into a delivered price of $11.64 per mmBtu if sold outside Gujarat and $12.04 per mmBtu if sold within Gujarat, sources said.

Commenting on the development, GAIL Chairman and Managing Director, Mr Proshanto Banerjee said, "GAIL has now once again achieved a milestone by selling the first internationally-traded spot cargo of LNG. The Indian gas market has now attained full maturity despite all speculations. This summer, consumers can look forward to cheaper power produced from LNG rather than naphtha."

With this successful marketing of spot LNG, the domestic gas market is aligned with the global gas market. Going forward, GAIL is in discussion with major suppliers for bringing more LNG cargoes from South East Asia, West Asia and North Africa, the company said. The first spot cargo of LNG from Sonatrach, Algeria was received on the May 20 at Dahej.

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