GAIL plans capacity expansion, and new LNG Terminals amid surging imports

NEW DELHI : GAIL, India’s largest gas distributor, aims to more than double the capacity of its LNG terminal in Dabhol, Maharashtra, and construct new terminals across the country to seize upcoming opportunities in gas imports.

The gas transporter plans to raise the capacity of its Dabhol terminal to 12 million tonnes per annum (mtpa) in a phased manner by 2030-31, GAIL Chairman Sandeep Kumar Gupta said.

Currently, the terminal operates at around 2.9 mtpa, although its nameplate capacity is 5 mtpa. This limitation is due to seasonal shutdowns during the monsoon. To address this, the company is constructing breakwater infrastructure to ensure year-round operation.

GAIL is also drawing up plans for new LNG import terminals but those are in the preliminary stages, Gupta said.

“Around half the current gas consumption is met by imports and the share is unlikely to come down by 2030. If more gas has to be imported, more terminals will be needed,” Gupta said.

The nation currently has approximately 48 mtpa of LNG import capacity, with an additional 20 mtpa reportedly in development.

“But if the gas goals are to be met, these terminals will not be sufficient, and we will need to add more,” Gupta said, referring to the national goal of increasing the share of natural gas in the primary energy mix to 15 per cent by 2030 from around 6.5 per cent now.

The government’s push to increase natural gas usage in the economy has led to the establishment of several LNG terminals in recent years. However, despite this expansion, gas consumption and imports have not kept up, resulting in significant underutilisation of these terminals.

LNG is imported under open general licensing (OGL) category on the terms and conditions mutually agreed upon between the buyers and sellers. After regasification, the imported LNG is distributed to industries and domestic consumers through existing trunk pipeline networks passing through various states.

Currently, out of the seven LNG terminals in the country, four operate at less than 25 per cent capacity, and two operate below 40 per cent. Only one terminal, the Dahej terminal, which is India’s oldest and largest, operates at over 95 per cent capacity.

However, the GAIL chairman expressed hope that this underutilisation will gradually be resolved as domestic demand and imports rise.