Page 4 - AsianOil Week 08 2021

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India’s GAIL to sell US LNG

imports locally from 2023

PROJECTS & GAIL (India) has unveiled plans to stop selling
COMPANIES the LNG it sources from the US in international
markets, instead selling it locally from 2023. This
comes as India’s domestic demand for gas rises
with the commissioning of new fertiliser plants.
GAIL buys roughly 5.8mn tonnes per year Hub-linked US LNG affordable for Indian
(tpy) of LNG from the US. According to com- customers.
ments made by GAIL’s executive director, Rajeev Demand from Indian fertiliser plants is set to
Singhal, at an analyst conference, the company rise this year and next. By March, the Ramagun-
sold 2.5mn tonnes of its US supplies in global dam fertiliser plant in southern India is expected
markets last year. to reach full capacity, requiring 750,000 tpy of
These sales come as a result of time and desti- LNG. This will be followed by the commission-
nation swap deals for some of the volumes GAIL ing of fertiliser plants at Durgapur in eastern
buys, struck in an effort to cut the landed cost India and Gorakhpur in the north later this year,
for Indian customers and trade the remainder in with these plants respectively requiring about
overseas markets. 1.25mn tpy and 750,000 tpy of LNG. And next
The reduction in volumes traded in overseas year, two more plants at Sindri and Barauni in
markets is expected to be gradual, with Singhal eastern India are due to come online next year,
saying the company hopes to trade less than 2mn each requiring 750,000 tpy of LNG according to
tonnes of its US volumes this year, and poten- Singhal.
tially around 1mn tonnes in 2022. GAIL has contracts for procuring LNG vol-
“From 2023 we will not be selling our US umes from the US under two long-term offtake
LNG in foreign markets except for any arbi- agreements. A new LNG carrier chartered by the
trage opportunity,” he said, adding crude prices company, the GAIL BHUWAN, was named ear-
reaching $60 per barrel had made GAIL’s Henry lier this month in an online ceremony.™

Aramco and Reliance resume O2C talks

FINANCE & TALKS are reported to be back on track for and world’s biggest integrated refinery and pet-
INVESTMENT state-owned Saudi Aramco to acquire a 20% rochemicals complex,” he said.
stake in India’s Reliance Industries Ltd’s (RIL) He added that while the deal was subject to
oil-to-chemicals (O2C) division, which includes due diligence, by ensuring Aramco crude is used
the world’s largest refinery. as feedstock for the refinery, the deal could pay
A report in India’s Economic Times said that for itself within 18 months.
negotiations on the deal are seen picking up While the talks were reported to have been
momentum from April this year, citing sources paused given the impact of the COVID-19
with intimate knowledge of proceedings who pandemic, Aramco CEO Amin Nasser said in
said that the final deal could comprise a combi- August last year that “the work is still on. We will
nation of stock and cash. update our shareholders in due course”. Given
In August 2019, Aramco signed a letter of that the recent oil price boost has allowed the
intent (LoI) to purchase a 20% stake in RIL’s company’s finances to recover significantly from
refining, petrochemicals and fuels marketing the woes that led it to reduce its 2020 capital pro-
businesses for around $15bn, thereby valuing gramme by around $12bn, the Dhahran-based
Ambani’s company at $75bn. company is now in a better position to move
RIL’s chairman and managing director, forward.
Mukesh Ambani, added that as part of the deal, However, the shock of the combined impact
his company would agree to a long-term pur- of the pandemic, weak demand and plummet-
chase of 500,000 barrels per day (bpd) of Ara- ing oil prices has brought greater scrutiny on all
mco crude. spending, particularly in the downstream, which
“Saudi Aramco and Reliance have agreed has been haemorrhaging cash, which is likely to
to form a long-term partnership in our oils to be behind the stock and cash approach.
chemicals division […] This signifies the perfect The news comes as RIL shares rose 1.5%
synergy between the world’s largest oil producer after the Economic Times reported that it was

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