India's state-owned gas utility GAIL India Ltd is evaluating several proposals for equity stakes and long-term supply deals in the United States, Middle East and Southeast Asia, its chairman said on Saturday. The company's strategy is part of the country's efforts to secure overseas energy supplies to satisfy rising domestic demand.
Gail signed a deal with US-based Cheniere Energy in December to buy 3.5 million tonnes of LNG a year under a 20-year contract starting from 2017. It has been in talks with Macquarie Energy, which has a share in the US-based Freeport LNG project, and last year, agreed to buy a 20-percent stake in one of Carrizo Oil & Gas Inc's US shale gas assets for $300 million.
"There are many proposals we are discussing," GAIL Chairman B.C. Tripathi told Reuters in an interview, adding these included projects in the United States, Middle East and Southeast Asia, but declining to give details. "It is difficult to give a timeframe because we have to settle on a price. In the Indian market there is a big appetite for gas, but it is all price sensitive," he said.
On Friday, a consortium of GAIL and state-run oil producer Oil and Natural Gas Corp said it was still not out of the race for Africa-focused gas explorer Cove Energy Plc. "We have support of government to look for the larger energy security of the country and look for gas supplies, whether it is through buying equity, or through long-term contracts," Tripathi said.
India, Asia's third-largest economy, is already the world's eighth-largest importer of liquefied natural gas (LNG). Those imports could rise five-fold in the next decade as its domestic gas output falls and demand surges. Problems at the D6 block off India's east coast, operated by Reliance Industries, have curtailed output while ONGC is struggling to arrest declining production from its ageing fields, forcing up imports of expensive LNG.
India needs gas to help power its electricity generation, fertiliser sector, city gas distribution and for its expanding industries. GAIL, which is gradually stepping up from its primarily gas transmission portfolio to emerge as a major petrochemicals and LNG player in the local market, is looking to spend 300 billion rupees ($5.86 billion) on capacity expansions over the next four years, Tripathi said.
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