Gujarat Gas in 12-year supply pact with GSPC

Ahmedabad: State-owned gas distribution major Gujarat Gas Co Ltd (GGCL) has executed a long-term gas supply contract with its parent Gujarat State Petroleum Corporation (GSPC) for the purchase of 0.65 million metric standard cubic meter per day (mmscmd) for next 12 years.

Under the agreement, GSPC will supply imported re-gassified liquefied natural gas (R-LNG) to GGCL from January 1, 2014 up to July 01, 2025. The move is seen as a major relief for GGCL, as it will get assured gas supply for a long period. GGCL’s dependence on spot LNG will reduce, as the supply pact is expected to help it meet nearly 50 per cent of its total R-LNG requirement of around 1.3 mmscmd.

In an MoU signed last September, GSPC had agreed to supply up to 0.85 mmscmd of gas to GGCL.

GGCL will buy 0.574 mmscmd (of gas) between period March 1, 2014 up to July 01, 2025, and 0.076 mmscmd between January 01, 2014 up to July 01, 2025, said a statement filed with exchanges by GGCL. The price of gas will be determined in the relevant gas station control systems and it is expected to be formula-based.

Meanwhile, GGCL is also exploring other options to secure long-term gas supplies to further reduce its dependence on the costly spot LNG.