State-run gas company GAIL (India) Ltd has reportedly swapped 60 percent of its previously contracted U.S. LNG supplies as it is trying to reduce costs for price-sensitive Indian customers.
The Indian company has a contract with Cheniere to buy 3.5 million mt per annum of LNG for 20 years from Sabine Pass and has also booked capacity for another 2.3 million mt at Dominion Energy’s Cove Point liquefaction plant.
GAIL sold 3.5 million tonnes of the U.S. LNG via time swaps, destination swaps and shipping optimisation, the Press Trust of India reported on Tuesday citing the company’s head B C Tripathi as saying.
GAIL is one of the Asian LNG buyers trying to avoid shipments of Henry Hub-linked LNG from the U.S. after the global oil and gas price downturn reduced the discount of U.S. gas relative to other suppliers.
The Indian company previously said it signed three time-swap deals under which Gail will buy LNG from international companies this year and sell equivalent amount of Henry Hub-indexed volumes during 2018-19.
Also, GAIL has entered into destination swap transactions to take deliveries of LNG from a nearer location.
Tripathi said some of the time-swapped volumes have already started arriving in India but refused to give details of the companies GAIL has entered into deals with, according to the report.
GAIL expects U.S. LNG supplies to begin arriving from March-April next year.
LNG World News Staff