GAIL Signs 15-Year Gas Supply Pact with OIL to Secure Up to 900,000 SCMD from Rajasthan Fields

New Delhi, July 10, 2025: GAIL (India) Ltd (NSE: GAIL, BSE: 532155) has signed a significant long-term Gas Sale and Purchase Agreement (GSPA) with Oil India Ltd (OIL) to secure up to 900,000 Standard Cubic Metres per Day (SCMD) of natural gas. This agreement spans a 15-year period, commencing from July 1, 2025.

Deal Overview

The newly executed agreement extends GAIL’s existing GSPA with OIL. It specifically covers gas sourced from the Bakhri Tibba Block in Rajasthan, which includes the Dandewala, Tanot, and Bagi Tibba fields. The natural gas procured under this agreement will be supplied to Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL), thereby strengthening energy supply to a key state-run power generation facility in Rajasthan.

What is SCMD?

SCMD stands for Standard Cubic Metres per Day. It is a common unit of measurement for the volume of natural gas produced, transported, or consumed. The “standard” typically refers to a specific set of temperature and pressure conditions (e.g., 1 atmosphere pressure and 15.56 °C in India) under which the gas volume is measured, ensuring consistent reporting regardless of actual operating conditions.

Contract Details

The contract was formally executed in New Delhi by Shri Sumit Kishore, Executive Director (Marketing-Gas) of GAIL, and Shri Ranjan Goswami, Executive Director (Business Development) of OIL.

Strategic Implications

This agreement highlights the synergistic efforts between two Maharatna Central Public Sector Enterprises (CPSEs) aimed at boosting domestic gas utilisation and enhancing India’s energy security. It underscores the strategic importance of tapping into domestic natural gas reserves in Rajasthan and aligns with national priorities for the adoption of cleaner fuels, particularly in power generation.

GAIL continues to be India’s leading natural gas transporter and marketer:

• Operates a 16,421 km gas pipeline network across India.
• Transmitted 127+ MMSCMD of gas in FY 2024-25.
• Runs a petrochemical complex at Pata (810 KTA capacity) and BCPL (280 KTA).
• Controls a 16.56 MMTPA LNG portfolio (approx. 60 MMSCMD), covering 61% of India’s total LNG imports.
• Holds strong positions in City Gas Distribution and is actively expanding into renewables such as solar, wind, and biofuels.

What are Maharatna CPSEs?

“Maharatna” is a prestigious status granted by the Government of India to select Central Public Sector Enterprises (CPSEs). This designation indicates that these companies are large, high-performing public sector undertakings that have demonstrated exceptional financial performance, operational autonomy, and strategic importance to the nation’s economy.

The Maharatna status provides several benefits, including:

• Greater Autonomy: Maharatna companies enjoy enhanced operational and financial autonomy.
• Increased Investment Power: They can make high-value investment decisions (e.g., up to ₹5,000 crore or 15% of their net worth in a single project) without prior government approval, enabling quicker and more efficient decision-making.
• Global Expansion: The status aims to empower these companies to expand their operations and emerge as global giants.

Both GAIL (India) Limited and Oil India Limited (OIL) are currently classified as Maharatna CPSEs.

Stock Price Movement

As of 9:25 AM, the shares of GAIL were trading at ₹185.99, up by 0.52% or ₹0.96. It remains to be seen how the shares will perform throughout the market session and at what price they close at the end.

Road Ahead

The long-term GSPA strengthens GAIL’s gas sourcing portfolio, ensuring a stable supply for Rajasthan’s power sector. It also enhances OIL’s monetisation of domestic reserves from Rajasthan, improving upstream viability. For GAIL, consistent supply from domestic fields reduces LNG import dependence and improves margins. Strategically, this deal aligns with India’s goal to raise the share of gas in its energy mix from 6% to 15% by 2030. Going forward, both firms may explore further collaborations in upstream-offtake tie-ups, city gas expansions, and cleaner energy transitions.

About GAIL

GAIL (India) Limited is a Maharatna CPSE under the Ministry of Petroleum and Natural Gas. It is listed on both NSE (GAIL) and BSE (532155). The company is India’s largest gas utility, engaged in natural gas processing, transmission, marketing, and distribution, with expanding footprints in petrochemicals, LNG trading, CGD, and renewable energy sectors.

REF: https://www.bseindia.com/xml-data/corpfiling/AttachLive/ae2b886e-9dae-49c3-922a-36338b498dc1.pdf

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