Gail Signed a 10 Year Pact With ADNOC Gas for LNG

GAIL (India) Ltd. has recently announced signing a 10-year Sales and Purchase Agreement (SPA) with ADNOC Gas, one of the UAE’s well-known natural gas companies. This deal, the first between ADNOC Gas and an Indian buyer, will see GAIL receiving up to 0.52 million metric tonnes per annum (MMTPA) of liquefied natural gas (LNG) starting in 2026.

The LNG will be shipped from ADNOC’s Das Island facility, a globally trusted LNG hub that has been in operation since 1977. With a production capacity of 6.0 MMTPA, Das Island has already delivered over 3,500 LNG cargoes across the world, making it a positioned one in international energy markets.

Why Does This Matter?

India’s appetite for natural gas is growing on a day-to-day basis. Currently, natural gas accounts for just 6% of India’s primary energy mix, but the government has set a target to increase this to 15% by 2030. To meet this demand, companies like GAIL are expanding their LNG portfolios and securing long-term supply agreements like this one.

GAIL’s Director (Marketing), Sanjay Kumar, talked about the importance of this deal in catering to India’s energy demand. “India is seeing growing demand for LNG across sectors, and this agreement is a crucial step in expanding our LNG portfolio to serve our consumers better,” he said.

Win for Both 

For ADNOC Gas, this deal will establish its position as a globally known LNG supplier. With demand for LNG projected to rise by 15% over the next decade, driven by industrial reasons like coal-to-gas transitions in Asia, ADNOC plans to double its LNG production capacity in the coming years.

GAIL (India) Ltd share price is currently at Rs.185.80, down 1.64% today but up 11.76% year-to-date and 49.13% over the past year.

Conclusion: The agreement adds certainty to the country’s energy needs. As demand for LNG is rising, GAIL is securing resources to support industries and households effectively. It also strengthens ties between India and the UAE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.