Gail eyes stake in gas assets abroad

NEW DELHI: State-run Gail is in talks with several entities to acquire stakes in foreign gasproducing assets, said chairman and managing director Sandeep Kumar Gupta as India pushes efforts to achieve energy security.

The company is interested in assets that are either already producing or on the verge of producing gas, Gupta said in an interview. “We always keep looking out for possibilities the world over and if there are assets, especially if there are producing assets available or near- producing assets available, we will be more than interested to have our stakes in those assets. Several discussions are also going on,” he said.

Gail, which already holds stakes in 10 exploration and production blocks in the country, has participating interest in two blocks—A1 and A3— in Myanmar and 20% stake in a shale gas joint venture in Eagle Ford Basin, Texas, US.

The company is part of a consortium in two offshore exploration and production blocks in Myanmar. These blocks produce around 15.33 million standard cubic metres a day of gas which is supplied to China through South East Asia Gas Pipeline Company Ltd in which Gail is also an equity partner, according to its annual report for FY23.

Primarily a natural gas infrastructure, marketing and trading firm, Gail’s revenue from exploration and production (E&P) business accounted for about 0.8% of its total revenue from operations in the last financial year. Operational revenue from E&P stood at ₹1,134 crore, out of the overall revenue from operations of over ₹1.45 lakh crore.

The move comes after a unit of Russian state-run Gazprom reneged on its contracted supplies to Gail starting May 2022, for around a year on high spot prices. Gazprom’s former subsidiary, Gazprom Marketing and Trading Singapore (GMTS), had signed an agreement with Gail to supply 2.5 million tonnes of liquified natural gas per annum for 20 years, starting in 2018-19.

Speaking on the matter, Gupta said: “That supply has been fully restored. We are getting full cargoes...supplies under that contract are progressing well.”

The emphasis on more producing assets is in line with the government’s target of increasing the share of gas in India’s energy mix to 15% by 2030 from the current 6%.