GAIL to set up retail LNG biz with Rs 650 cr investment; plans to acquire 50% market share in 6 years

State-run leading natural gas company GAIL India is looking to foray into retail LNG (liquified natural gas) aiming to increase the use of LNG as a transportation fuel with a potential investment of Rs 650 crores, the company said on Thursday. 

Highlighting the potential of LNG business to grow substantially, the company, in an exchange filing, said that it plans to set up LNG dispensing stations across golden quadrilateral or major national highways, aspiring to acquire more than 50% market share in the next 5-6 years. 

“This will help GAIL in the retail LNG sector, leading to an increase in natural gas portfolio. By converting transport fuel from diesel to LNG, reduction in carbon footprint is envisaged,” the company said. GAIL’s new business plan comes at a time when the government is aiming to increase the share of natural gas in the energy mix to 15% from present 6% by 2030 enabling it to realise the goal of net-zero by 2070.

“Proposed line of business investment is strategic in nature which relates to exploring opportunity-based investment for the development of LNG dispensing infrastructures & last mile connectivity along golden quadrilateral/national highways, mining areas as alternative to diesel meant to serve customers with fuel having lower carbon footprints,” it said. 

In an interview with FE earlier, the company had highlighted its plans to extend its portfolio in the LNG segment. “We have a strong conviction that LNG transportation has a huge potential and within GAIL we have set up a vertical of retail LNG. We have a roadmap also prepared and we will be shortly announcing our plans in detail for this,” the the company’s chairman and managing director Sandeep Kumar Gupta had told FE.

Presently, GAIL sources LNG from US, Qatar, Australia, and Russia among others with a total portfolio of around 14 million metric tonne per annum and is looking for further such contracts. 

The company recently signed contracts for additional 1.5 million metric tonne of gas supplies taking its entire volume to 15.5 million tonne per annum from 2026. The contracts include 1 mmpta of gas supply from Vital Asia and 0.5 mmpta from ADNOC starting 2026.

Talking about its investment plans, the Chairman had said that the company is targeting a capex of Rs 10,000 crore for the next financial year. In FY24, GAIL has targeted a capex of Rs 7,750 crore which was later revised and increased to Rs 10,000 crore.