GAIL India Adopts Flexible LNG Strategy

7 Sep 2023 , 02:25 PM

GAIL (India) Ltd is adapting its LNG supply strategy for greater flexibility, targeting 20% to 25% of supply through short-term or spot market transactions, according to a company official cited by Reuters. Sanjay Kumar, GAIL’s marketing director, revealed this strategy at the Gastech industry conference in Singapore, emphasizing the need to respond to fluctuating market dynamics and demands.

The remaining LNG supply will continue to flow through long-term contracts, ensuring a stable source of natural gas. Despite the strategic shift, GAIL faced challenges in its recent financial results, with a 45% decline in consolidated net profit for Q1FY24 compared to the previous year, dropping to Rs 1,793 crore from Rs 3,250 crore.

Revenue from operations also decreased by 13% in the same period, falling to Rs 32,848 crore from Rs 37,942 crore. However, GAIL demonstrated resilience in its core operations, with a 7% increase in natural gas transmission volume in the April-June 2023 quarter, reaching 116.33 MMSCMD from 108.23 MMSCMD in the previous quarter.

GAIL’s gas marketing volume also saw a 2% increase, reaching 98.84 MMSCMD compared to 96.46 MMSCMD on a quarter-on-quarter basis. Impressively, GAIL India’s stock price has surged by more than 30% year-to-date, with a 9% gain over the past week and nearly 19% over the last three months.

GAIL’s strategic shift in LNG procurement positions it for greater adaptability and resilience in the ever-evolving energy sector.

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