MGL gains spot-market flexibility with Petronet LNG gas supply deal

Panaji: Petronet LNG Limited (PLL) and Mahanagar Gas Ltd (MGL) on Tuesday signed a Master Agreement to increase the flexibility of the city gas distributor’s operations in the wake of rising volatility in global gas markets. Under the agreement, PLL will purchase LNG shipments and supply regasified LNG to MGL.

The agreement will be valid for a period of one year, with a provision for extension based on the mutual consent of both parties, officials said. The agreement will enable MGL to optimise and supplement its gas supply portfolio through the use of international spot prices of LNG, providing greater flexibility in sourcing and managing gas supplies.

For PLL, the proposed execution of the agreement is part of its strategy of optimal use of its LNG regasification infrastructure, while providing integrated LNG sourcing and regasification services to gas consumers, including City Gas Distribution (CGD) entities with adequate storage and operational flexibility.

The current Master Agreement was signed at India Energy Week in Goa, in the presence of PLL Managing Director and CEO Akshay Kumar Singh and MGL Managing Director Ashu Singhal.

MGL is a related party of PLL, as GAIL (India) Ltd holds a 32.5 per cent equity stake in MGL and is also a promoter of PLL. Officials clarified that the transaction has been undertaken on an arm’s-length basis.

PLL, a joint venture of GAIL, ONGC, IOCL, and BPCL, operates LNG regasification terminals in Gujarat and Kochi in Kerala, with a total capacity of 22.5 MMTPA.