GAIL eyes swap for US gas to save shipping costs
State-run gas utility GAIL is set to introduce a new element in India’s energy trade by swapping more than a third of liquid gas contracted from two US projects to save transportation time and costs as falling prices squeeze margins.
India’s energy trade is predominantly based on buying crude and gas or exporting products under term contracts or through spot deals. At home, GAIL had in 2011 entered into a gas swap deal with Reliance industries Ltd for helping power plants in Andhra Pradesh.
Under the US gas swap deal, GAIL’s shipments would be sent to European buyers whose original suppliers from West Asia, Africa or Asia Pacific would send an equivalent quantity to India. This would save transportation costs for both GAIL — if it were to bring the US gas to India — and West Asian, African or Asia Pacific gas suppliers to Europe.
