GAIL and Chubu Electric Power have signed a Memorandum of Understanding (MoU), under which the two companies will explore the possibilities for collaboration in the area of joint LNG procurement. They will also seek to collaborate on shipping optimisation.
Chubu and GAIL are both large LNG importers, and the companies have considerable synergy between their LNG business profiles. GAIL hopes that the collaboration to pursue LNG procurement will augment its efforts to aggressively source LNG volumes on competitive terms.
Asia LNG Forum
This latest agreement is part of GAIL’s recent efforts to establish and promote an Asia LNG Forum. The company is also actively working towards establishing a regional gas-trading hub for Asia, as well as an Asian gas index.
This MoU with Chubu is yet another effort by GAIL towards bridging the gap in demand supply of natural gas in the Indian market. Other projects by GAIL include initiatives related to LNG sourcing, creating LNG regasification infrastructure, reserving liquefaction tolling capacity in overseas projects and augmenting transmission capacity significantly over the next few years.
Speaking during the inaugural Ministerial session at Gastech, Mr. Tripathi, chairman and managing director of GAIL, highlighted the considerable potential for gas demand in Asia.
Despite being the largest importer of LNG, the Asian market is paying premium for LNG. In order for Asia to move forward, the region needs to develop synergies between countries by promoting cross border pipelines to bring gas from central Asia, interlink Asian countries through gas pipelines, and promote the Asian Co-operation Forum to address Asian Gas Grid and Asian LNG forum and Asia Hub/index.
Tripathi added that in the future, the Asian market will prefer suppliers who have reliable and diverse sources of supply and who can offer transparent and competitive pricing methodologies.
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/24032014/gail_and_chubu_lng_collaboration_328/