India’s GAIL charts gas supply strategy where energy security, transition converge

GAIL (India) Limited is preparing for an energy market where supply security and the shift toward cleaner fuels are increasingly intertwined, with the state-run gas company expanding its LNG sourcing, pipeline network, and downstream businesses while investing in other low-carbon technologies, a top company official said Aug. 27.

The strategy comes against a backdrop of heightened geopolitical risks that disrupted global LNG supply chains in fiscal year 2025-26 (April-March), causing volatility in prices, freight rates and availability, said Deepak Gupta, GAIL chairman and managing director, at the annual meeting.

"Energy security has become as important as energy transition," said Gupta, highlighting the Middle East conflict as a fundamental reality to the issue of energy security for India, a country that meets half of its gas demand via imports.

"Natural gas, by virtue of its flexibility and lower carbon intensity, continued to play a critical role in enabling an orderly energy transition," Gupta shared.

GAIL transmitted an average 122 million cu meters/day of natural gas through its pipeline network in FY 2025-26 and marketed about 104 million cu m/d, including international sales, Gupta said.

GAIL's pipeline network stretches beyond 18,690 km, with another 1,500 km under construction, the company said.

Once the projects are completed, the network is expected to approach 20,000 km, strengthening India's National Gas Grid, it added.

GAIL is also building greater flexibility into its LNG business, the chairman said. Its sourcing portfolio stands at 16.56 million metric tons/year, comprising long-term contracts and market-linked purchases, Gupta said.

"To support this growing portfolio, we are strengthening our shipping capabilities," Gupta said, adding that GAIL presently has access to a fleet of nine LNG ships, including five vessels under long-term charter, enhancing the company's supply chain and logistics.

Long-term charter agreements were concluded for GAIL Bhuwan, with a capacity of 180,000 cubic metres, and Energy Fidelity, with a capacity of 174,000 cubic metres, according to the company.

In FY 2025-26, GAIL imported 132 LNG cargoes, including seven spot cargoes, while expanding its shipping capability through long-term charters, the chairman said.

Due to the completion of the breakwater facility at the Dabhol LNG Terminal, the terminal achieved year-round operability and received its first LNG cargo during the monsoon season, GAIL shared. The terminal also received its 1000th LNG cargo during the year, GAIL continued.

Dabhol LNG terminal is owned and operated by Konkan LNG Ltd (KLL), a subsidiary of GAIL (India) Limited.

In addition, GAIL is also expanding its international presence. GAIL Global (USA) LNG LLC supports sourcing and liquefaction arrangements for the company's US portfolio, while GAIL Global (Singapore) Pte. Ltd. is strengthening LNG trading and international business, Gupta shared.

Meanwhile, the establishment of GAIL Global IFSC Limited is meant to support treasury management and explore opportunities in international financial services as well as ship leasing, he shared.

Downstream expansion, petrochemicals push

A key element of the company's longer-term strategy is to capture greater value downstream, he said.

GAIL commissioned a 60,000 metric tons/year polypropylene unit at Pata, taking integrated capacity there to 870,000 mt/y, and is progressing with its $1.2 billion worth, 500,000 mt/y propane dehydrogenation-polypropylene project at Usar in the western state of Maharashtra, Gupta said.

The Usar project, planned as India's first PDH-based PP complex, is intended to strengthen domestic petrochemicals manufacturing and reduce import dependence, according to the company.

GAIL is also developing a 1.25 million mt/y purified terephthalic acid plant at Mangalore, giving it exposure to another petrochemicals value chain, it said.

"These investments in petrochemicals are not simply about adding capacity. They are about developing a more diversified downstream business and strengthening the growth of GAIL's petrochemical portfolio," Gupta said.

Simultaneously, GAIL is expanding its LPG infrastructure, it said.

GAIL is doubling the capacity of the 1,427-km Jamnagar-Loni LPG pipeline to 6.5 million mt/y, while the Petroleum and Natural Gas Regulatory Board has authorized three new LPG pipelines with a combined length of about 1,775 km, Gupta said.

GAIL's revenue from operations stood at $14.5 billion in FY 2025-26 with $730 million as net profit, the company said.

"Our ambition is to build a GAIL that is stronger, more resilient, more diversified, technologically enabled and fully prepared for the opportunities of tomorrow," the chairman said.

For the Indian energy market, the strategy marks a gradual evolution of GAIL from a predominantly gas transmission and marketing company into a broader energy-infrastructure and downstream platform, Gupta said.

Its investments across LNG, petrochemicals, LPG, compressed biogas and low-carbon technologies could allow it to participate in multiple segments of India's energy transition while retaining natural gas at the center of its business, Gupta said.