India’s Gail signs 14-year time charter for LNG carrier

India's state-controlled gas distributor Gail has signed a 14-year time charter agreement with US-based LNG shipping firm CoolCo for an LNG carrier, the former said on 16 May.

The time charter for the LNG carrier will start operating from early 2025 as it is currently under construction. Gail is likely to receive the carrier during October-December in the Gulf of Mexico, CoolCo said.

The charter will be the fifth LNG carrier in Gail's vessels that are intended to secure long-term supply of LNG in India. Gail will have an option to extend the charter by two additional years beyond its contracted 14-year period.

The LNG carrier will likely be used to ship LNG volumes from the US, Russia, and from its recent contracts with Abu Dhabi's state-owned Adnoc and trading firm Vitol, a company official told Argus. (See table)

"Long-term cargoes are there and there are a few lifts from the spot markets as well," the source added. "It is how the consumption pattern of the country is now shaping more towards LNG since domestic volumes are constrained."

The firm also planned to add an LNG tanker to ship cargoes from the US, Argus exclusively reported in February.

Gail expects India's gas demand to rise and has been looking to secure more term deals. Gail is seeking an additional 7mn-8mn t/yr of LNG for its portfolio with a further 1mn-2mn t/yr, the firm said in January. This reiterates targets set in August last year.

Gail's portfolio growth aligns with the government's plan to increase the share of gas in its primary energy mix to 15pc by 2030 from around 6pc in 2022.

By Rituparna Ghosh