GAIL (India) Ltd, a state-owned enterprise, is pursuing a long-term contract to secure liquefied natural gas (LNG) deliveries starting in 2027, according to four sources familiar with the matter. The agreement, spanning five to ten years, will link LNG prices to Brent crude oil benchmarks. The company aims to procure six LNG cargoes in 2027 and eight in the following year, with plans to purchase one cargo monthly from the third year onward.

Gail India Ltd's logo is seen at Gastech 2023 in Singapore September 7, 2023.

The deadline for suppliers to submit offers is July 24, as confirmed by two sources. This initiative reflects GAIL’s strategy to ensure a stable LNG supply as India’s energy demands grow. As the country’s largest gas distributor, GAIL has enhanced its infrastructure to support this goal, particularly at its Dabhol LNG terminal in India.

The Dabhol facility, now operational year-round after the addition of a breakwater, has a current capacity of 5 million metric tons per year (tpy). GAIL plans to expand this to 6.3 million tpy by mid-2027 and further to 12.5 million tpy by 2031-32, aligning with the anticipated increase in LNG demand. These upgrades will strengthen the terminal’s role in meeting India’s energy needs.

A GAIL spokesperson stated: “There was no comment on the inquiry available.” The company’s focus on securing a reliable LNG supply underscores its commitment to supporting India’s energy infrastructure. By linking the deal to Brent crude oil prices, GAIL aims to establish predictable pricing for its LNG imports, ensuring cost stability for its operations.

This long-term contract is part of GAIL’s broader efforts to meet rising domestic consumption while maintaining a steady supply chain. The Dabhol terminal’s enhanced capacity will play a critical role in handling increased LNG volumes, supporting industries and households across India. The deal’s structure, with a gradual increase in cargo deliveries, reflects a strategic approach to scaling up operations in line with infrastructure advancements.

LNG, a key component of India’s energy mix, is vital for powering industries, electricity generation, and other applications. GAIL’s proactive steps to secure a consistent supply highlight the importance of energy reliability in supporting economic growth. The company’s plans to expand the Dabhol terminal demonstrate its commitment to meeting future demand efficiently.

By initiating this tender, GAIL is positioning itself to strengthen India’s energy security through diversified and stable LNG sourcing. The outcome of the July 24 bidding process will shape the company’s supply chain strategy for the coming decade, ensuring it can meet the country’s growing energy requirements effectively.