GAIL and Vitol Asia Pte. Ltd. have signed a long-term LNG deal into India, the former said in an exchange filing. The deal is to supply approximately one million metric tonnes of LNG per annum for a period of ten years, starting 2026.
As per this deal, Vitol will deliver LNG from its global LNG portfolio to GAIL on a pan-India basis.
GAIL CMD Sandeep Kumar Gupta said that this deal will contribute to bridging India's demand and supply gap of natural gas.
"India is a significant and growing LNG market and we are excited to bring LNG supply from our global LNG portfolio to meet this rising natural gas demand in India," Vitol CEO Russell Hardy said.
GAIL is involved in multiple negotiations with various LNG suppliers for long-term deals, according to Sanjay Kumar, GAIL's Director of Marketing.
GAIL has around 70% market share in gas transmission and 50% in gas trading in India. It has a network of over 16,000 km of natural gas pipelines on a pan-India basis and is working on multiple projects to expand the network.
2023 turned out to be GAIL's best year in terms of share price returns since 2009. The stock had gained nearly 60% to surge to a record high.
However, Kotak Institutional Equities believes that the stock is running ahead of fundamentals due to optimism. As a result, the brokerage downgraded the stock to "Sell" from the earlier rating of "reduce." However, it marginally raised its price target on the stock to ₹125 from ₹120 earlier.
Shares of GAIL are trading 0.5% higher at ₹163.95. The stock is off the day's high.
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