GAIL to skip medium term LNG deals for 2018

GAIL (India) Limited will be skipping medium-term LNG deals in 2018 as it will start getting LNG from its US portfolio from February 2018. GAIL used to buy one medium-term contract every year to cater to domestic demand. However, it will not be doing so in 2018. Reportedly, GAIL has signed contracts for sourcing up to 5.8 million tonnes (mt) of LNG from the US. The company is also likely to cut its spot purchases once volumes from the US start coming in. Further, in 2018, GAIL expects to obtain close to 80 cargoes from the US. Pricing of US LNG is linked to a formula but other charges including freight to India add an extra $2-$3 per million British thermal units, leading to GAIL scouting for destination, time and volume swap deals.