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Press Release
[New Delhi, Janruary 13, 2005]GAIL goes global for LNG Sourcing
LNG requirement to cross 15 MMTPA by 2007 says GAIL CMD

Anticipating a surge in the total requirement of LNG in the country, GAIL (India) Limited is inviting Expression of Interest (EOI) from prospective suppliers for Liquefied Natural Gas (LNG) for Long Term (20-25 years) and Short Term (5-10 years) bases, supply and delivery of LNG at multiple sites on competitive terms. The company is looking for 20-25 years ex-ship / FOB supply contract based on international commercial terms like take or pay / supply or pay obligations with LNG club rules and upward / downward flexibility, pricing formula (fixed + variable components), price indexation (JCC/Brent / Dubai) etc. The likely time frame for commencement of supply to the industry would be from 2005-06.

Commenting on the development, Mr. Proshanto Banerjee, CMD GAIL said, “GAIL seeks to source additional LNG from multiple sources across the globe. Supplies of LNG to GAIL offer attractive and long-term business opportunities for potential suppliers of consistent high sales volumes. The total requirement is expected to mature to 15 MMTPA by 2007”.

Currently, GAIL owns and operates more than 5600 km of high-pressure Natural Gas pipelines serving more than 400 major customers. These pipeline networks carry both domestic gas as well as regassified LNG being imported from Dahej LNG terminal. GAIL has 60% marketing rights of the regassified LNG from this terminal. Based on GAIL’s internal assessment of potential market demand, GAIL would import LNG at the existing and proposed LNG regassification terminal at Dahej, Dabhol and Kochi on the west coast and Ennore terminal at the east coast. The LNG can be supplied from single or multiple liquification facilities either on ex-ship or FOB basis. Ex-ship delivery would be proposed in the initial stage of the supply.

GAIL will be taking 33% equity participation in Ennore Regassification Terminal to be set up in Tamil Nadu and will undertake marketing of 3 million MT of R-LNG from the Ennore terminal. The company is undertaking a detailed feasibility study for the Ennore LNG terminal. The deep water port at Ennore is compatible for LNG imports that could be sources from multiple countries like Malaysia, Indonesia and Australia.

GAIL is a leader in natural gas transmission and marketing in India. The company has significant and dominating presence in all aspects of natural Gas value chain. The natural gas markets in India are poised to grow owing to unprecedented burgeoning demand growth projections emerging from the liberalization of major consuming sectors including Power and Fertilizers. The Energy Markets in India are evolving to be dynamic and vibrant.