GAIL to ob­tain In­dian ships

GAIL plans to in­volve In­dian com­pa­nies in its $7.5-bil­lion, 20-year LNG im­port­ing plan.

Cargo Talk - - Cargo News -

GAIL (In­dia) Ltd, the largest sta­te­owned nat­u­ral gas pro­cess­ing and dis­tri­bu­tion company, plans to buy ships made by do­mes­tic ship­builders for trans­port­ing gas from the USA. This would prove ben­e­fi­cial to do­mes­tic com­pa­nies such as L&T and Pi­pavav.

GAIL (In­dia) would have to in­cur a mas­sive cost of $7.6 bil­lion for hir­ing the re­quired spe­cialised ves­sels. Ac­cord­ing to re­ports, the company has agreed to is­sue a ten­der for char­ter hir­ing of nine newly build LNG ships in three lots of three ships each. In each lot, one ship will be built in In­dian ship­yard. While for­eign com­pa­nies will have to de­liver ships in three years, do­mes­tic ship­builder will get an ex­tended time of up to six years.

GAIL (In­dia) has re­cently be­come Asia’s first company to sign a long-term LNG sale and pur­chase agree­ment with Che­niere En­ergy Part­ners; LP (Che­niere) to pro­cure 3.5 mil­lion tonnes per an­num of LNG from the lat­ter’s Sabine Pass Ter­mi­nal in Louisiana, USA for a pe­riod of 20 years.

At present, USA gas is avail­able to only those coun­tries with which it has a free trade agree­ment (FTA), of which In­dia is not a part. How­ever, it is ex­pected that the USA would agree to sell LNG to In­dia by ex­empt­ing it from the re­quire­ment of a com­pul­sory FTA when the Prime Min­is­ter Naren­dra Modi, vis­its Wash­ing­ton DC in Septem­ber. Though two projects in the USA, where GAIL (In­dia) has a stake, have been given spe­cial per­mis­sion for fu­ture sourc­ing, In­dia would pre­fer a com­plete waiver from the ex­ist­ing con­di­tions.

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