GAIL sees scope for more US LNG share in India's energy mix as prices attractive
New Delhi: As India and the US negotiate a trade deal, chairman and managing director of state-run gas utility GAIL Ltd Sandeep Kumar Gupta said that there is potential for import of more liquefied natural gas (LNG) from America and increase its share in India's energy basket.
Addressing the media on Tuesday, Gupta said that at current prices, import of natural gas from the US "makes good sense". Currently, the spot price of natural gas at Henry Hub, US, is around $3.4 per MMBtu (Million British Thermal Units). Gupta said that prices are expected to remain in a range of $3.5-4 per MMBtu in the near term.
Also read: GAIL Dividend: Maharatna PSU announces 10% dividend along with Q4 results. Check details here
Henry Hub serves as the official delivery location for natural gas futures contracts traded on the New York Mercantile Exchange. This makes it a crucial benchmark for North American natural gas prices.
"We already have a very attractive portfolio. In our old portfolio, 5.8 trillion tonne is coming from the US. There is great potential for other players also to increase their offtakes from the US. And at country level, I think we have a great appetite for US LNG. If the HH (Henry Hub) prices are say around $3.4 to $4 which is the present range, I think this makes a good sense in importing US volumes. There is a great flexibility if we contact on FOB (freight on board) basis, because we can swap the US cargos also at an opportune time, so we believe there is a great potential," Gupta said.
This comes at a time when India and the US are holding talks for a bilateral trade agreement and India is expected to increase its oil and gas imports from the US.
Also read: Maharatna PSU GAIL India's Q4 net profit rises 1% YoY to ₹2,506 crore; dividend declared
The company has received five proposals for equity stakes in US LNG projects, each linked with offers for long-term LNG supply contracts, said the director (business development) Rajeev Kumar Singhal. GAIL last month floated a tender seeking up to 26% stake in a US LNG project, bundled with a 15-year LNG supply contract. GAIL's latest tender is a revival of a similar process kicked off by the public sector entity in FY23. It was stalled when the erstwhile US administration put a freeze on new LNG export permits for projects in 2024.
On Tuesday, the company reported a 1.26% uptick in its consolidated net profit for the January-March quarter to ₹2,505.61 crore. Its net profit during the same period of the previous fiscal (FY24) was ₹2,474.31 crore.
Its total income during the fourth quarter of FY25 rose 11.71% on a year-on-year basis to ₹36,943.51 crore.
For FY25, its consolidated net profit jumped 26% to ₹12,462.87 crore, and its revenue rose 6.3% to ₹1.31 trillion.
Also read: Indian Oil signs $1.4 billion LNG supply deal with Trafigura
Its board of directors has recommended a final dividend of ₹1 per equity share, with a face value of ₹10 per equity share for the financial year 2024-25, subject to shareholder approval at the upcoming annual general meeting (AGM). This is in addition to the interim dividend of ₹6.50 per equity share.
The company incurred a capital expenditure of ₹10,512 crore during FY25.
During the year, its natural gas transmission volume grew 6% to 127.32 mmscmd (million standard cubic meter per day) as against 120.46 mmscmd in FY24. Gas marketing volume stood at 101.49 mmscmd in FY25, compared to 98.45 mmscmd in FY24.
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