India's Gail pens 10-year LNG deal with Adnoc Gas

Indian state-owned gas company Gail has inked a 10-year agreement with Adnoc Gas, a unit of the UAE's Adnoc, to purchase 0.5mn tonnes/year of LNG, it said on January 29.

The deal, following a memorandum of understanding signed in 2022, signifies a strategic collaboration between the two companies. Under the agreement, LNG deliveries are slated to commence from 2026 onwards.

Sandeep Kumar Gupta, managing director of Gail, said the the collaboration will aid in India's rising energy security requirements and, simultaneously, also fuel Gail's strategic growth objectives to cater to its downstream customers in the rapidly evolving natural gas landscape of the country.

This deal comes on the heels of Gail's recent 10-year agreement with commodity trader Vitol to purchase 1mn tonnes/year of LNG. Gail's LNG portfolio, currently standing at approximately 14mn tonnes/year from various contracts, includes long-term agreements with Qatar, Gazprom, ExxonMobil (Gorgon LNG), and two contracts with US suppliers, Cheniere and Dominion, both indexed to the Henry Hub. 

Gail is one of India’s largest natural gas companies with integrated operations across the value chain, including exploration and production, processing, transmission, distribution, marketing, petrochemicals, LNG trading and shipping, city gas distribution and related services. 

in 2022, Adnoc formed Adnoc Gas as a new entity responsible for natural gas processing, operations, and marketing. It brought together the operations, maintenance, and marketing of Adnoc Gas Processing and Adnoc LNG businesses into one consolidated business.

In line with its plans to meet the increasing global demand for natural gas, Adnoc intends to more than double its LNG production capacity through its planned LNG growth project, including the construction of its second LNG facility in Al Ruwais Industrial City, Al Dhafrah.