Oil & Gas

08 Jan 2024

Vitol Inks 10-Year LNG Supply Deal With Gail India

08 Jan 2024  by rigzone   

Vitol will supply GAIL (India) Limited with approximately one million metric tons of liquefied natural gas (LNG) per annum for 10 years beginning in 2026.
Vitol Asia Pte Ltd has signed a long-term deal to supply GAIL (India) Limited with approximately one million metric tons of liquefied natural gas (LNG) per annum for 10 years beginning in 2026.

Under the agreement, Vitol will deliver LNG from its global LNG portfolio to GAIL in India on a pan-India basis, the two companies said in a joint news release Friday.

“This long-term LNG deal with Vitol by GAIL will augment its large Liquefied Natural Gas (LNG) portfolio and will contribute to bridging India’s demand and supply gap of natural gas”, GAIL Chairman and Managing Director Sandeep Kumar Gupta said.

“We are pleased to build on the existing relationship between Vitol and GAIL and to conclude this long-term LNG supply deal together”, Vitol CEO Russell Hardy said. “India is a significant and growing LNG market and we are excited to bring LNG supply from our global LNG portfolio to meet this rising natural gas demand in India”.

GAIL owns and operates a network of over 16,000 kilometers (9.942 miles) of natural gas pipelines. GAIL commands around 70 percent market share in gas transmission and has a gas trading share of over 50 percent in India.

Dutch multinational company Vitol trades 7.4 million barrels per day of crude oil and products, and charters around 6,000 sea voyages every year. Vitol’s clients include national oil companies, multinationals, industrial companies and utilities. Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally, including 17 million cubic meters of storage globally, approximately 500,000 barrels per day of refining capacity, over 7,000 service stations and a growing portfolio of transitional and renewable energy assets. The company has a global LNG portfolio with long term LNG supply from North America, Africa, the Middle East, and Asia and a global fleet of LNG. In 2022, Vitol physically delivered approximately 14 million tons of LNG.

Compressed Biogas Joint Venture

Meanwhile, GAIL has signed a term sheet for its equity participation in TruAlt Bioenergy Limited’s joint venture company Leafinti Bioenergy Limited, which owns and operates India’s second compressed biogas (CBG) plant. TruAlt is the largest ethanol producer in India.

TruAlt Bioenergy will own 51 percent of the joint venture while GAIL will own the remaining 49 percent. The investment in building CBG plants will surpass $72 million, funded through a combination of debt and equity and subject to due diligence and requisite approvals, GAIL said in a separate news release.

Leafinti Bioenergy will process over 600 million kilograms per year of organic waste such as agricultural residue and sugarcane press mud to produce over 33 million kilograms of CBG, nearly 20 million kilograms of solid fermented organic manure and over 30 million kilograms of liquid fermented organic manure. Each unit will have a capacity of 10,000 kilograms per day resulting in daily production of 100,000 kilograms of CBG, according to the release.

“CBG has emerged as a viable alternative to imported fossil natural gas”, GAIL Business Development Director Shri Rajeev Kumar Singhal said. “The signing of the term sheet is a step in the right direction considering the emphasis on cleaner and greener fuel and [the] country’s vision of Atmanirbhar Bharat [self-reliant India].”

“We have been spearheading the production of ethanol and various other biofuels since 2012 to advocate for more sustainable energy practices”, TruAlt Founder and Managing Director Shri Vijay Nirani said. “With the immense support of the Government of India to create a biofuel based economy, TruAlt Bioenergy has emerged as one of the leading dedicated Bioenergy companies and also one of the largest contributors to India’s landmark Ethanol Blended Petrol (EBP) program. Through this partnership we aim to create a robust ecosystem for CBG in India allowing for a smooth transition to economical and ecological sources of energy”.


More News