Adani Total has a 20-year take-or-pay contract to provide regasification services to state-run Indian Oil Corp for 3 million tonnes of LNG per annum at the Dhamra terminal. Government-run gas distributor GAIL (India) Ltd has a similar 1.5 million tonnes per annum deal.
Adani Total – in which French oil and gas major TotalEnergies has a 50% stake – said it was still in discussions on how much gas it would supply Indian Oil and GAIL, adding that a final decision had not been taken yet.
“We are still in discussions, we have not finalized supply plans, but we are, in the first year, expecting close to about 2.2 million tonnes,” Chief Executive Satinder Pal Singh told Reuters on the sidelines of the India Energy Week conference.
Indian Oil and GAIL did not immediately respond to a request seeking comment on supply plans.
India’s LNG imports fell for the second straight year in 2022, mainly due to fewer imports by utilities as the country ramped up coal-fired power production at the expense of natural gas.
The energy-hungry country expects deeper penetration of city gas distribution to drive LNG demand in the coming years. The Dhamra terminal, which was supposed to be commissioned during the second half of 2021, is now expected to start operations in the fiscal year beginning April.
Under so-called “take-or-pay” obligations, payments are still due even if a buyer cancels a cargo due to unusually low demand.
“The demand is always there at the right price. I think things are starting to look better but it’s a volatile market,” Singh said.
Global LNG prices eased off record highs in the second half of 2022, amid ample inventories in North Asia and Europe. (Additional reporting by Sudarshan Varadhan; Editing by Emelia Sithole-Matarise)