Huge interest in LNG swap offer from GAIL
Nearly 30 offers have poured in to GAIL following its EOI notice to swap LNG cargoes so it can save transportation costs from the US.
GAIL wants to swap cargoes from its 3.5m t/y deal to receive LNG from the Sabine Pass liquefaction facility on the Texas and Louisiana border, which begins in the first quarter of 2018. A GAIL source confirms it received EoIs by May 5 but declines to reveal the exact number or any names.
"The response this time was better than last time," he says. He is referring to a similar exercise GAIL carried out in October 2015 where it received EoIs from 23 companies including Shell, BG, RasGas, QatarGas and Gazprom.
That tender was scrapped amid confusion over bidders' commercial qualifications. GAIL is now planning to draw up a draft term sheet after discussions with bidders.
Companies who agree to GAIL's final term sheet will be shortlisted and asked to send in proposals, a process that could take up to six months. Explaining its logic, GAIL says several companies have contracted cargoes from Middle East suppliers for delivery to Latin America or Europe.
GAIL wants these companies to instead take its cargoes from Sabine Pass for their European or Latin American customers and in return offer GAIL their Middle East cargoes for India, saving transport costs all round.
