GAIL buys LNG cargo for $6.65 per mmBtu

State-run gas utility GAIL India has bought an LNG cargo for $6.65 per mmBtu, about $2 million more than the rate at which Petronet LNG imported a shipload just two days later.

GAIL imported a liquefied natural gas cargo from Repsol of Spain on November 21, at a landed cost of $6.65 per million British thermal unit, industry sources said. Two days later, Petronet LNG Ltd, the nation's largest LNG importer, got a cargo from British energy giant BG Group at a landed cost of $6 per mmBtu.

Sources said GAIL may have paid more than market price as it bought the cargo from a company which is not a producer of LNG. Repsol is a user of LNG and may have sold to GAIL a cargo for which it could not find market back home.

This was GAIL's first direct purchase of a cargo from spot market since 2006, when it was barred by the Oil Ministry from making direct purchases due to fear of it shelling out more than the market price.

In November, Petronet imported one LNG cargo from Gaz de France at $6.07 per mmBtu and in end-October it got a cargo from Australia's North West Shelf at $4.30 per mmBtu, sources said.

GAIL imported the cargo at Petronet's Dahej import terminal in Gujarat. On the $6.65 import price, it paid an import duty of 5 per cent and then a $0.60 per mmBtu to Petronet for converting the liquid gas into its original gaseous state (called regassification).