State-owned GAIL (India) Ltd. is planning to import 10 more cargoes of liquefied natural gas (LNGLF)
(LNG) following its success in selling the entire stock of the first shipment imported in May and sold to domestic industries after regassification. The company is in talks with Qatar, Oman
and Abu Dhabi in the United Arab Emirates
(UAE) for spot purchases. Normally, countries inform one month in advance if any LNG cargo of three trillion British thermal unit (Btu), or equivalent of 80 million standard cubic meters (MMSCM) of natural gas, is likely to become available. On the basis of competitive bids, the spot cargo is sold. The spot cargo at $7.5-$9.3 delivered price is much higher than the long-term contracts India and other import dependent countries are negotiating. After adding various taxes and other costs, it translates into a delivered price of $11.64 per mmBtu if sold outside Gujarat and $12.04 per mmBtu if sold within Gujarat, Hindustan Times reported
. GAIL does not see spot cargo model sustaining as a long term model, but as a short-term solution since the availability of LNG cargo and price of such purchases are risky. Referring to Ratnagiri Gas and Power Ltd., formerly known as Dabhol power project, GAIL said LNG supplies are set to begin in March 2007 as against earlier plans of beginning imports from January. The delay in completion of the pipeline from Dahej to Ratnagiri is cited as the reason for postponement of gas supplies from Qatar
, which has agreed to supply additional 1.2 million tons of LNG on short term basis in addition to five million tons it is already supplying Petronet LNG under a long-term contract. The price of the additional 1.2 million tons LNG is expected to be finalized this week with a team from Qatar's RasGas expected in New Delhi.
(Source: Hindustan Times)