State-owned GAIL (India) Ltd, the nation’s largest gas utility, has entered into a 14-year charter agreement for a new liquefied natural gas (LNG) carrier, starting early 2025. The contract has been signed with Cool Company Ltd, a New York Stock Exchange-listed firm, at an undisclosed daily rate.
This strategic move aims to secure the long-term supply of LNG to the rapidly expanding Indian market, with an option for GAIL to extend the charter period by an additional two years. Cool Company Ltd, in its statement, revealed that the LNG tanker will be delivered in the Gulf of Mexico. This vessel is one of two state-of-the-art, highly efficient newbuilds ordered by Cool Company from an undisclosed shipyard. Eastern Pacific Shipping Pte Ltd and its affiliates are the largest shareholders of Cool Company. The charter agreement with GAIL will see the new LNG carrier, one of the most efficient and lowest-emission vessels in the global fleet, enhance GAIL’s capacity to import super-chilled fuel from the United States. GAIL has existing contracts to purchase 2.5 million tonnes per annum of LNG from Sabine Pass Liquefaction LLC, USA, which commenced in February 2018. Additionally, GAIL has secured 2.3 million tonnes per annum of capacity at the Cove Point LNG liquefaction terminal, with supplies starting in April 2018.
Currently, GAIL operates four LNG tankers for its US imports, under two-time charter agreements with Mitsui O.S.K Lines Ltd and two with NYK Line Ltd, both from Japan. This new charter with Cool Company is expected to further bolster GAIL’s logistical capabilities in the LNG sector. Cool Company’s two newbuild LNG carriers, expected to be delivered in the fourth quarter of 2024, are part of its commitment to maintaining a highly efficient fleet. This contract increases Cool Company’s firm revenue backlog to over $1.2 billion, with total potential revenue, including extensions, nearing $1.9 billion as of March 31, 2024.
GAIL continues to expand its global footprint through strategic participation in various projects and ventures along the natural gas value chain. With a global LNG portfolio of approximately 14 million metric tonnes per annum (MMTPA), GAIL has solidified its position as a leading player in the international LNG market. The company’s active involvement in LNG trading underscores its strategic focus on meeting the growing energy demands of India while strengthening its presence in the global energy landscape. By securing this new LNG carrier, GAIL is set to enhance its supply chain efficiency, ensuring a steady and reliable supply of LNG to support India’s burgeoning energy requirements. This long-term charter underscores GAIL’s commitment to leveraging advanced technology and strategic partnerships to drive growth and sustainability in the energy sector.
