(Bloomberg) -- GAIL India Ltd., the nation’s largest gas-pipeline utility, plans to negotiate a new long-term liquefied natural gas deal to meet rising demand.
“Hopefully we will be out very soon in the market for fresh enquiries” about a contract of at least 10 years, Chairman Sandeep Kumar Gupta said in an interview in London. “Before the end of this year this should get finalized.”
India’s gas use is set to grow as the expansion of industries such as chemicals manufacturing gathers pace. Heat waves in recent years have also pushed up LNG demand to fuel power generation for cooling. Importers such as GAIL are hoping a wave of new global supply later this decade will keep a lid on prices.
“We are very sure that our gas demand will be at least double by 2030,” Gupta said in a panel discussion Tuesday. Any LNG supply deal is likely to be for one cargo a month, though import capacity is increasing, he said.
GAIL’s contracted LNG volumes total about 15.5 million tons a year and include supplies from the US, Qatar and Australia, according to its annual report. Indian Prime Minister Narendra Modi wants to raise the share of gas in the energy mix to 15% by 2030 from about 6% — with a heavy reliance on imported LNG.
Prices may not “get softer” in the next two to three years, but will start sliding once new projects come on stream, according to Gupta, who said an increase in global oil supply may also weaken crude-linked gas costs.
The chairman declined to disclose which suppliers his company is negotiating with, but said the new deal will be similar to contracts signed in January with trading house Vitol Group and the UAE’s Abu Dhabi National Oil Co. Those agreements start in 2026.
--With assistance from Ruth Liao and Rakesh Sharma.
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