GSPC, Petronet, GAIL to gain from new LNG policy

GSPC, Petronet, GAIL to gain from new LNG policy

New Delhi: Gujarat State Petronet Ltd (GSPL) has been thought to be the biggest gainer from the Indian cabinet’s new liquefied natural gas (LNG) pooling policy that seeks to introduce a mechanism to utilise regasified LNG for the benefit of gas-based power plants connected to the grid.

GSPL’s current transmission volumes of 24m standard cubic metres per day (mscmd) ensure great benefit for the company, while state-run Petronet LNG would gain after the expansion of its Dahej facility from 10m to 16m tonnes per annum (tpa) by end-2016.

Post the Dahej expansion, GSPC has booked an additional 1m tpa capacity with Petronet, while government-owned gas importer GAIL has booked 2.5m tpa more. State-run refiners Indian Oil Corporation and Bharat Petroleum Corporation have also booked additional 1.5m tpa and 1m tpa capacity, respectively, for the long term.

GAIL, which has a presence across the gas value chain from its long-term LNG contracts, equity holding in regasification terminals and ownership of pipelines, would benefit from the pooling policy. However, its gains are expected to be lower, as it will have to forego part of its marketing margins from gas sector companies and its transmission tariff. Risks on spot gas sourcing also remain.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.

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