GAIL India sells LNG cargo because early monsoons lead to weak power demand.
GAIL (India) Ltd resold a liquefied gas (LNG) shipment this week, according to three sources in the market on Friday. The state-run company's tanks are full due to the weak demand for power in India.
GAIL, India's largest gas distributor could reduce India's appetite for super-chilled fuel by reducing the number of LNG imports. India was the fourth largest LNG purchaser in the world last year, with about 26 million metric tonnes imported. This is due to India's rapid industrialisation and urbanisation as well as its growing electricity demand.
Two sources said that GAIL's LNG tank capacity is full, but the company has decided to sell the LNG cargo because the power demand dropped due to the cooler weather during the monsoon.
GAIL didn't immediately respond to an inquiry for comment.
Although the three sources didn't specify which cargo GAIL sold or where it was shipped, shiptracking data indicates that two LNG vessels owned by GAIL have diverted from their route this week.
Kpler data revealed that the LNG tanker Gail Urja was on its way to India's Dahej terminal on June 21, but made a U turn on June 5, and headed to the Gate LNG Terminal in the Netherlands. Kpler data and LSEG showed that the vessel loaded LNG in Cove Point, Maryland (USA) on May 21-22.
GAIL has signed a deal for a 20-year period to transport 2.3 million tons of LNG per year from Cove Point. The average time for LNG tankers from Cove Point in India is four weeks.
Data shows that since June 2, another LNG tanker Grace Emilia has changed course around Mauritius and Reunion Island several times. The vessel now heads towards Asia.
India's Weather Office had predicted an above-average Monsoon Season for the second consecutive year in 2025. Annual rains would arrive at their earliest date in 16 years.
Early monsoons at the end summer had brought down temperatures across the country. The sharp fall in temperatures reduced electricity consumption, and for a short time pushed prices on power exchanges to zero.
The increased generation of hydropower and nuclear has also led to the decline in natural-gas fired power output. In May, this was at its steepest in almost three years. (Reporting from Singapore by Emily Chow, with additional reporting from Nidhi in New Delhi. Editing by Florence Tan & Toby Chopra).
(source: Reuters)
