India’s GAIL issues tender for up to 110 LNG cargoes after executing SPA with Vitol

India's state-owned GAIL has issued a tender seeking up to 110 LNG cargoes on a DES, DAP or CFR basis for delivery during the period 2027-36, sources with knowledge of the matter told Platts, part of S&P Global Commodity Insights, on July 14, citing the tender document.

The tender was issued following GAIL's July 14 announcement that it had executed a long-term LNG sales and purchase agreement with Vitol Asia Pte. Ltd. for the annual supply of about 1 million mt of LNG over about 10 years, starting in 2026. The execution of the SPA comes after the two parties signed a term sheet in January 2024.

The full cargo lot will range from 3.2 TBtu to 3.8 TBtu with a plus or minus 5% operational tolerance, and the contract price will be "Y" times the Brent slope in $/MMBtu.

In the tender, GAIL specified that it is seeking six cargoes in 2027, eight cargoes in 2028 and 12 cargoes each year from 2029 onward, with tenures ending between 2031 and 2036.

The tender involves a two-stage inquiry process, comprising an unpriced bid (stage 1) and a price bid (stage 2), which together will constitute the full inquiry, according to the sources.

Stage 1 sets the inquiry for terms and conditions, excluding price. In this stage, participants are expected to submit their offers confirming the terms and conditions outlined in the term sheet on or before the submission date.

While no offer submitted in stage 1 will be rejected, GAIL may hold discussions with participating entities regarding the terms.

Stage 2, which involves the final non-negotiable term sheet for price quotations, will be shared only with participants who have submitted or confirmed the term sheet in Stage 1.

GAIL will consider the offers submitted in stage 2 and award contracts for any contract term based on the lowest slope offered, regardless of the quoted contract term.

The last day for submission of stage 1 terms is July 24, while the deadline for submitting stage 2 offers is Aug. 18, with price validity until Aug. 21.

Platts assessed the August JKM, the benchmark price for LNG cargoes delivered to Northeast Asia, at $12.997/MMBtu on July 14, up by 23.9 cents/MMBtu, or 1.9% day over day. Platts assessed the LNG West India Marker, or WIM, for August at $12.575/MMBtu on July 14, at a discount of 42.2 cents/MMBtu to the August JKM assessment.