In order to promote gas usage and to increase use of cleaner fuel and making Liquefied Natural Gas (LNG) more affordable to end users in the industries, the Government has reduced the basic customs duty on LNG from 5 per cent to 2.5 percent on 2 February, 2017.
Import of LNG supplies from Russia’s Gazprom
LNG Cargo of Russian natural gas under the long term contract between GAIL India Limited and Gazprom Marketing & Trading Singapore (GMTS) of Russia was received on 4 June, 2018. The gas price is negotiated between parties depending on many factors like project location, duration of contract, pricing formula, etc. GAIL India Limited and Gazprom successfully re-negotiated the long-term LNG Sale and Purchase Agreement reflecting the current global gas market dynamics.
The renegotiated price, compared to earlier contract price, will result in saving of approximately ₹ 8500 crore (crude oil at US $50 per barrel) or ₹ 9000 Crore (crude oil at US $60 per barrel) or ₹ 9500 crore (crude oil at US $70 per barrel) for the years 2018 to 2040. Import Price per unit of LNG under GMTS contract is very competitive and currently cheaper than other long-term LNG supplies being received by GAIL at any delivery port in India.
Long-term LNG Contracts
Following long-term LNG contracts have been signed by Central Public Sector Undertakings (PSUs) and its Joint Ventures (JVs) with various countries:
|S. No.||Company||Supplier||LNG Quantity (MMTPA)|
|1||Petronet LNG Limited||Ras Gas, Qatar||7.5|
|2||Petronet LNG Limited||Ras Gas, Qatar||1.0|
|3||Petronet LNG Limited||Mobil Australia Resources Company Pty. Ltd., Australia||1.44|
|4||GAIL||Gazprom Marketing & Trading Singapore Pte. Ltd. (GMTS), Russia||2.85|
|5||GAIL||Sabine Pass, USA||3.50|
|6||GAIL||Dominion Energy Cove Point (DECP), USA||2.30|
|7||IOCL||Diamond Gas International Pte Ltd, USA||0.7|
LNG is imported under open general license on the terms and conditions mutually agreed upon between the buyers and sellers.
India has four operational LNG import terminals at Dahej, Hazira, Dabhol and Kochi with a total LNG import capacity of 27.5 MMT. After regasification, the imported LNG is distributed to industries and domestic consumers through existing trunk pipeline networks passing through various states.