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India's state gas utility GAIL to import 90 US LNG cargoes in FY 2020-21

New Delhi — Indian state-owned gas utility GAIL plans to import 90 LNG cargoes -- or around 5.8 million mt of LNG -- from the US in the fiscal year ending March 31, 2021, almost the same volume as it expects to import in the current fiscal year (April 2019-March 2020), company officials said Monday.

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This will be more than the 75 cargoes, or around 5 million mt of US LNG, the state-run gas utility had planned to import at the start of the current fiscal year that began on April 1, 2019, mainly to cater for additional demand from the fertilizer sector.

Comparatively, GAIL imported 62 cargoes of US LNG in the last fiscal year, running April 2018 to March 2019.

Overall, in financial year 2020-21, GAIL expects to source 250 LNG cargoes -- around 14 million mt -- globally, which means that the US will account for around 36% of India's total LNG imports.

This will be unchanged from the 250 LNG cargoes it expect to import this fiscal year ending March 31, 2020, although there is room for single-digit percentage growth in LNG demand.

"We primarily source LNG cargoes via long term contracts," said Rajeev Singhal, executive director in charge of GAIL's LNG business.

He added that demand for LNG could grow by around 3-4% in the next financial year beginning April 1, 2020.

GAIL, which is also India's gas transmission major, has a long-term contract for 5.8 million mt/year of US-origin LNG, along with long-term swap contracts in place until March 2022.

India has long-term LNG supply contracts with countries like Qatar, Australia, and Russia.

Singhal said prevailing natural gas prices worldwide were far below the parity level with global crude prices. For a crude price of $100/b, the LNG parity price for India works out at around 14.5%, he added.

Petronet LNG, another state-run company, is expected to supply around 70 cargoes, around 4-4.5 million mt, to GAIL in fiscal 2020-21.

India, the third-biggest energy consumer after the US and China, aims at securing 15% of its total energy mix from natural gas by 2030, up from current levels of about 6%.

The Prime Minister Narendra Modi-led government's focus on raising the share of gas in the overall energy mix has attracted the interest of global giants like ExxonMobil and Total in the Indian gas market.

GAIL is setting up an additional 15,000 km of pipelines as part of a national gas grid project.

-- Ratnajyoti Dutta, newsdesk@spglobal.com

-- Edited by Joe Fisher, newsdesk@spglobal.com