GAIL (India) is working towards lowering the supply cost of imported liquefied natural gas (LNG) by reworking the existing deals.

Speaking at the FICCI - India Gas Infrastructure conference, GAIL Chairman and Managing Director, B C Tripathi said, “We are working on renegotiating more LNG supply deals.”

GAIL currently has a 20-year contract with Cheniere Energy for the supply of 3.5 million tonnes per annum (mtpa) of LNG. The company also has a deal with Dominion Energy’s Cove Point liquefaction plant for the supply of another 2.3 mtpa.

Tripathi’s comments came after the recent renegotiation of the Gorgon contract between Petronet LNG (PLL) and ExxonMobil for gas coming from Australia. PLL had also successfully reworked its contract with Qatar’s Rasgas in 2015 to lower the landed cost of gas and waive the earlier penalties.

Senior Vice-President and Group Head of the Corporate Sector Ratings at ICRA, K Ravichandran, said that the Gorgon deal has paved the way for renegotiating more LNG contracts.

He said: “Already utilities in Japan have grouped to pool their buying power and seek more flexible and shorter-term deals.”