India's state-owned gas utility GAIL expects to import 34 spot LNG cargoes in fiscal year 2013-14 (April-March), more than double the 16 spot cargoes it imported in the previous year, to meet demand for the Dabhol LNG terminal and make up for a shortfall in domestic gas production.
"We are also seeing a lot of gas demand from segments other than power and fertilizer ... such as steel, city gas distribution and other industries. Right now demand [for gas] is huge," a GAIL spokesman said Wednesday.
GAIL commissioned the Dabhol LNG terminal located at Ratnagiri in the western state of Maharashtra, in January this year after several delays.
he terminal is currently closed due to the monsoon season and is expected to resume operations in the first week of October, the spokesman said.
The Dabhol terminal is managed by Ratnagiri Gas and Power Ltd., in which GAIL and state-owned power utility NTPC have a 29.65% stake each. The remaining equity is held by financial institutions and the Maharashtra State Electricity Board.
The terminal has a capacity of 5 million mt/year, but the absence of a breakwater makes it technically difficult for the terminal to receive any LNG vessels during the monsoon season, so it can only operate for eight to nine months in the year.
"We will soon award a contract for the construction of a breakwater," the spokesman said, adding that he expected the breakwater to be ready in 2016 after which the terminal will operate all year round.
GAIL is also planning to expand the capacity of the Dabhol terminal to 7.5 million mt/year and expects to complete the expansion in 2016, he added.
GAIL currently has two term LNG contracts with French GDF Suez and Spain's Gas Natural Fenosa.
Since late 2011, it has signed two 20-year offtake deals in the US. The first is a contract with Cheniere Energy for 3.5 million mt/year from the Sabine Pass terminal, Louisiana starting 2016, and the second a 2.3 million mt/year deal with Dominion Cove, Maryland.
GAIL also has a 20-year LNG import contract with Russia's Gazprom for 2.5 million mt/year with deliveries to begin in 2019.
The utility is also expanding its LNG import capacity. Besides Dabhol, it has a 12.5% stake in Petronet LNG, which operates a 10 million mt/year LNG import terminal at Dahej in the western state of Gujarat. GAIL has been in talks with Petronet to lease 2.5 million mt/year of capacity at the terminal.
Separately, GAIL has formed a joint venture with Andhra Pradesh Infrastructure Corp. to set up a 3.5 million mt/year floating storage and regasification unit at Kakinada on the east coast in Andhra Pradesh.
The joint venture aims to commission the terminal in September 2014, an executive with the venture said on May 15.
