This has resulted in State-owned natural gas utility GAIL (India) Ltd. having come a pretty long distance into building its capacities for transport for liquefied natural gas. The company has signed a new long-term charter for a new LNG ship with Kawasaki Kisen Kaisha Ltd, also known as K-Line, that is to start up operations by 2027. This is significant for both parties and is further targeted to scale up GAIL’s ability to meet domestic as well overseas demands for LNG. A new LNG carrier under a long-term charter will be developed by the firm Samsung Heavy Industries and the one already within its fleet from the GAIL entity.
Key Details of the Long-Term Charter Agreement
According to GAIL, the one that issued the statement, this has been done through a Singaporean ship-owning company. The newly ordered LNG vessel is supposed to have a capacity of 174,000 cubic meters. It would, therefore, be a two-stroke modern engine vessel and be capable of carrying heavy volumes of LNG.
The company has shipbuilding as a part of main South Korean Companies. Shipment supplied to customers was of exquisite quality. Partnership between GAIL and Kawasaki Kisen Kaisha will further the fleet of GAIL, due to the delivery of liquefied natural gas from one to other geographical area.
Importance of the Deal for GAIL and K-Line
This will be the first time GAIL and K-Line are entering into a long-term charter on a new-built LNG vessel, which is considered the increasing port of strong partnership between the two parties. The ship will start operations in 2027, as per an agreement several years in duration. It would play a very important role in the further expansion of the LNG transportation infrastructure of GAIL.
This is a giant step for GAIL to meet the surging demand of LNG in India and worldwide. The company has a complex transport network of LNG through advanced ships. This is an essential input, which supports the efficient and timely delivery of LNG to supplement domestic consumption besides fulfilling export orders all over the world.
K-Line is one of the largest shipping companies in Japan that will handle and take care of the vessel. K-Line has handled LNG before. This will, therefore mean the new vessel shall be treated professionally and efficiently such that the cargo will find its destination in its final point of delivery. The new ship thus marks one of the important steps into increasing the share of K-Lines LNG business with increasingly becoming the leading alternative provider for cleaner energies.
GAIL’s Expanding LNG Fleet
The plan of GAIL to enhance its capability of shipping of LNG is in process through four ships of LNG in GAIL. These are LNG ships like GAIL Bhuwan, GAIL Urja, Grace Emilia, and Maran Gas Pericles. It transports LNG super-cooled and sells it all around the globe. The aforementioned addition by K-Line to the fleet of GAIL would bring more biceps power to enable it to meet all these demands in a better way.
Apart from the existing fleet, GAIL is adding two more LNG vessels in its fleet in the next year. Among them, one will be a new LNG ship on long-term charter besides adding more LNG capacity for meeting the surge in demands in natural gas.
Strategic Sourcing of LNG by GAIL
GAIL has diversified LNG sourcing from over 15 million tonnes a year. It sources the LNG from various geographies in North America and delivers it to Indian customers and other international markets. The majority of GAIL’s fleet carries LNG on a free on board basis, where the mode of shipment enables it to determine at what location gas is delivered.
The new charter agreement aligns with the long-term vision of GAIL towards getting the most reliable and efficient LNG transportation solutions, which will help sustain the supply chain of the company and address the needs of both domestic as well as international customers. With this new ship and other vessels to be incorporated into its fleet shortly, GAIL is equipped enough to deal with the higher demand of LNG in various areas.
The Role of LNG in India’s Energy Future
The significance of India’s energy transition was going to lie in the increasing importance of LNG. LNG, being cleaner than the coal and the other fossil fuels, could ensure a carbon cut for India. Long-term contracts signed with firms like K-Line would become really critical to fulfill the requirement with GAIL’s fleet of growing LNGs over time as these would set a reliable supply source for home as well as overseas markets.
India is surely becoming one of the key global LNG players with increased LNG infrastructure building. The strategic alliances and investments made by GAIL in LNG transport and sourcing will be at the center of Indian energy security and the country’s progress toward cleaner sources of energy.
Conclusion
One of the major developments for GAIL is a long-term chartering agreement signed with K-Line for a new LNG vessel. This will enhance its LNG transportation capacity. Now, GAIL will be able to transport liquefied natural gas efficiently in order to cater to the ever-growing energy requirements of India and other global markets. With GAIL now adding diversified sourcing and, in addition to a growing LNG fleet, it can turn out to become one of the leaders across the globe for this sector. The K-Line deal can actually be an excellent strategic business and supports a valuable step forward into helping India transform towards much more cleaner and much better sustainable sources of energy.
Refer:
Economic Times, Link to article