Gujarat Petronet signs up with GAIL for Dahej LNG

Vol 7, PW 23 (11 Feb 04) News in Brief

Gujarat Petroleum has signed a 5-year gas sales agreement with GAIL for regassified LNG from Dahej.

The agreement, signed just two days before the 9th February commissioning of the Dahej terminal, commits GAIL to supply 500,000 tonnes a year of regassified LNG to Gujarat Petronet. Originally, Gujarat Petronet insisted on 1m t/y.

PETROWATCH learns GSPL has agreed to pay $3.53 per mmbtu to GAIL. This figure includes the disputed 10 cents per mmbtu that GAIL has been demanding as transportation costs even though the regassified LNG will pass directly form the Dahej terminal into Gujarat Petronets own pipeline.

Gujarat Petronet had earlier refused to pay the 10 cents extra because none of the gas will pass through GAILs infrastructure. We have agreed to pay this transportation charge for a few months, reveals a source.

The agreement is likely to be rewritten after the general elections.