GAIL hires LNG ship from CoolCo

GAIL has hired a LNG carrier from NYSE-listed Cool Company for a 14-year period to augment its transportation capability to meet India's rising gas needs
 

New Delhi: State-owned gas utility GAIL (India) Ltd has entered a long-term agreement with NYSE-listed Cool Company to enhance its LNG transportation capacity. GAIL has hired a newbuild liquefied natural gas (LNG) carrier from CoolCo for a 14-year period starting in early 2025, with an option to extend the charter for an additional two years.

GAIL currently operates a fleet of four LNG carriers, and the new vessel from CoolCo will be the fifth. This strategic addition aims to support GAIL’s efforts in meeting India's increasing demand for natural gas. The carrier will transport super-chilled fuel from the US, leveraging GAIL’s existing contracts to purchase 2.5 million tonnes per annum (MTPA) of LNG from Sabine Pass Liquefaction LLC since February 2018, and another 2.3 MTPA from the Cove Point LNG liquefaction terminal.

GAIL’s global LNG portfolio stands at approximately 14 MTPA, utilizing its fleet to import gas to India. Last year, GAIL expanded its fleet by chartering two LNG carriers from the Japanese shipping company Mitsui OSK Lines. The first vessel, GAIL Bhuwan, was chartered in 2021, followed by GAIL Urja in December 2023.

S Bairagi, Executive Director of Marketing Shipping & International LNG at GAIL, expressed enthusiasm about the new LNG carrier from CoolCo, emphasizing its role in GAIL’s plans to address the growing natural gas demand in India.

Richard Tyrrell, CEO of CoolCo, praised the long-term charter agreement, highlighting the advanced technology and superior economic and environmental performance of the newbuild LNG carrier, which will ensure efficient and cost-effective transportation of LNG for GAIL.

CoolCo specializes in LNG shipping with a portfolio balancing short and long-term charters. It plans to grow further with two newbuilds scheduled for delivery in the second half of 2024. CoolCo’s strategy also includes exploring opportunities for vessel acquisitions and potential consolidation in the fragmented market segment.