 "GAIL")
By Nidhi Verma
NEW DELHI (Reuters) - Gas firm GAIL (India) Ltd expects to end overseas sales of the liquefied natural gas (LNG) it secures from the United States from 2023, as local demand rises with the commissioning of new fertiliser plants, a company official said.
GAIL buys 5.8 million tonnes per annum (mtpa) of LNG from the U.S.-based projects. It has signed time and destination swap deals for some of these volumes to cut the landed cost for Indian customers and trade the remainder in overseas markets.
"As consumption in India increases, sales in international markets will be less so this U.S. RLNG (regassified LNG) will be consumed by fertiliser plants and other industries," said A.K. Tiwari, head of finance at GAIL.
Last year GAIL sold 2.5 million tonnes of its U.S. supplies in global markets, its executive director Rajeev Singhal told an analyst conference.
He said GAIL hopes to trade less than 2 million tonnes of its U.S. volumes this year, and in 2022 this could shrink to about 1 million tonnes.
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"From 2023 we will not be selling our U.S. LNG in foreign markets except for any arbitrage opportunity," he said, adding crude oil at $60 a barrel had made GAIL's Henry-Hub linked U.S. LNG affordable for price-sensitive Indian customers.
The Ramagundam fertiliser plant in southern India is expected to reach full capacity by March, requiring 0.75 mtpa of LNG.
Fertiliser plants at Durgapur in eastern India and at Gorakhpur in the north, requiring about 1.25 mtpa and 0.75 mtpa LNG respectively, will be commissioned later this year.
Two more plants at Sindri and Barauni in eastern India will come on line next year, each requiring 0.75 mtpa of LNG, Singhal said.
(Reporting by Nidhi Verma; Editing by Kirsten Donovan)
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