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Informist, Thursday, Dec. 5, 2024

 

--Sources: GSPC in final stage of deal with TotalEnergies for 60 LNG cargo

--Sources: GSPC looking for LNG supply over 10 years by TotalEnergies

--Sources: GSPC expects to sign deal with TotalEnergies by mid-Jan
--Sources: TotalEnergies may start supplying LNG cargo to GSPC from May 2026

--Sources: TotalEnergies to supply 6 LNG cargoes a year to GSPC

--Sources: GSPC, TotalEnergies deal worth $2.7 bln–$2.9 bln at current LNG rate

--Gujarat Gas official: In talks with others to buy 12-18 more LNG cargoes/yr

--CONTEXT: GPSC slated to merge with Gujarat Gas by Aug 2025 post rejig

--Gujarat Gas official: Aim to cut long-term LNG costs by $1.5-$2.0/mBtu

--Gujarat Gas official:Co's long-term LNG cost currently at $12.5-$13.0/mBtu

 

 

By Sunil Raghu

 

AHMEDABAD - Gujarat State Petroleum Corp. Ltd., the Gujarat government-owned company that is slated to merge with Gujarat Gas Ltd. by August 2025, is learnt to be in the final stages of reaching an agreement with TotalEnergies of France to source 60 liquefied natural gas cargoes over 10 years, four persons in know told Informist.

At current LNG prices of around $15 per million British thermal units, the total deal could be worth $2.7 billion to $2.9 billion. "Generally one LNG ship carries 3.2 trillion British thermal units, translating to nearly $45 million-$48 million per cargo delivered at the Indian port," a senior official with the state's energy department told Informist.

 

GSPC's long-term LNG sourcing cost for contracts till 2027 or 2028 are learnt to be at $12.5-$13.0 per mBtu. "We hope to shave at least $1.5-$2.0 per mBtu off current long-term LNG costs," said a top Gujarat Gas official, adding that both the companies expect to sign on the dotted line by mid-January. As per the agreement, TotalEnergies is required to begin supply of LNG from May 2026 and the cargoes could land either at Dahej or Mundra LNG terminals, a third official said.

 

GSPC currently imports nearly 30 cargoes of spot and long-term LNG every year. Of this, nearly 40% or more is sold to Gujarat Gas for city gas distribution. Gujarat Gas uses LNG in addition to central government-allotted domestic gas for its consumers across six states and Union Territory of Dadra & Nagar Haveli.

 

Around August-end, the Gujarat government proposed reorganisation of its natural gas business held through various entities - exploration & production and gas trading firm GSPC, Gas transmission firm Gujarat State Petronet Ltd., gas trading firm GSPL Energy Ltd, and pure play city gas distribution firm Gujarat Gas. The reorganisation entails merger of all these entities into Gujarat Gas. Hence, post restructuring, all the LNG sourcing agreements, including with Total of France, would fall directly under Gujarat Gas.

 

Currently, Gujarat Gas sells 9-12 million standard cubic metres per day of natural gas, depending on demand. Of this 3.00-3.25 mscmd goes to the compressed natural gas market, another 3.5-4.0 mscmd goes to Morbi, 1.0-1.5 mscmd to non-Morbi industrial market, and the rest to domestic and commercial consumers. Post restructuring, this would rise to 15-20 mscmd, as all the existing GSPC customers, including fertiliser and gas-based power entities, would become customers of Gujarat Gas. So Gujarat Gas will look at retail, consumer, industrial and large customers in the power fertiliser sectors.

 

"In addition to TotalEnergies, we are also in talks with 2-3 other global LNG suppliers to source 12-18 cargoes per year," the Gujarat Gas official said.

 

On Thursday, shares of Gujarat Gas closed 1.1% higher at INR 502.15 on the National Stock Exchange.  End

 

US$1 = INR 84.73

 

Edited by Ashish Shirke

 

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