GAIL Signs Long-Term LNG Agreement with Vitol Asia

The Gas Authority of India Limited (GAIL) has recently finalized a significant long-term liquefied natural gas (LNG) sales and purchase agreement with Vitol Asia, a subsidiary of the renowned energy and commodities company Vitol based in Switzerland.

This agreement, which builds upon a binding term sheet signed in January 2024, involves an annual supply of approximately 1 million metric tonnes per annum (mmtpa) over a duration of about 10 years, commencing in 2026. The LNG volumes will be sourced from Vitol’s extensive global portfolio.

Sanjay Kumar, GAIL’s Director of Marketing, expressed his satisfaction with the partnership, stating: “GAIL is expanding its long-term LNG portfolio to meet demand growth. We are pleased to partner with Vitol Asia Pte. Ltd., and this agreement represents a key milestone in reinforcing GAIL’s capability to reliably serve its diverse and evolving customer base.”

Earlier this year, GAIL was among the trio of Indian companies that struck a deal with Argentina’s YPF for 10 mmtpa of LNG from the proposed Argentina LNG project.

India’s Growing LNG Market

With India emerging as the world’s fourth-largest LNG importer in 2024, the demand for LNG in the country is expected to witness a steady rise over the next decade. The Indian government aims to boost the share of natural gas in the country’s primary energy mix from the current 6% to 15% by 2030.

Consequently, India’s LNG regasification capacity has experienced significant growth, nearly doubling from 21 mmtpa in 2014.

Vitol Asia’s Chief Financial Officer (CFO) Jay Ng emphasized the importance of the growing Indian market in their company’s strategy, highlighting Vitol’s diverse portfolio that enables them to provide India with a stable supply of cleaner and competitive energy.

In a separate deal in May, Vitol entered into an agreement with Oman LNG to purchase 800,000 metric tons per annum (mtpa) of LNG, further enhancing their ability to meet the evolving energy needs of customers worldwide.