Gail (India) Ltd, the public sector gas firm, on Tuesday announced that it has tied up the sale of its share of LNG being imported from Qatar and said the regassified LNG from Dahej is the most competitive fuel for power and fertilizer units.

"We are offtakers of 60 per cent of the 5 million tonnes of LNG being imported by Petronet LNG Ltd at Dahej from this month. We have tied up sale of our entire share," Gail chairman and managing director Proshanto Banerjee told reporters in New Delhi.

Refusing to disclose the names of companies to which Gail would sell regassified LNG from India's first LNG import terminal at Dahej, he said a full announcement would be made sometime in February when all sale purchase agreements (SPAs) would be signed.

So far Gail has signed SPAs with three-fourth of the firms who have committed to buy its share of regassified LNG.

The companies who have committed to buy gas from Gail include IPCL, Dahej, Essar Steel, Hazira and GSPL.

IOC and BPCL, who will offtake the remaining 40 per cent of the LNG from Dahej, too have tied up sale of their share of gas.

The three offtakers, who hold 12.5 per cent stake each in PLL, have signed agreements to sell re-gassified LNG for ten-year period. However, they have indicated a firm price only for the first five years.

Exploration firm ONGC is the fourth promoter with 12.5 per cent stake.

"We believe the kind of price we are offering it is certainly most competitive to all including power and fertilizer sectors," Banerjee said.

RasGas of Qatar is selling LNG to PLL at a fixed price of $2.53 per million BTU British Thermal Units, equivalent to $20 a barrel price of crude oil, for the first five years of the 20-year supply contract.

After adding shipping cost of 26 cents per mmbtu, customs duty (5 per cent) of 14 cents, regassification cost of 44 cents, and deducting 15 cents ONGC will pay for extracting C2/C3 from LNG, PLL will sell re-gassified LNG to offtakers -- Gail, BPCL and IOC -- at $3.25 per mmbtu.

The offtakers then add pipeline transportation cost, which is proportionate to distance from terminal, and marketing margin of up to 10 cents.

"The price thus arrived is being quoted for a period of five years," sources said, adding the delivered cost of LNG may be upto $3.9 per mmbtu, which compares with natural gas sold by private domestic producers.

After five years, RasGas will sell LNG to PLL on a price linked to a basket of crude oil with $16 per barrel as floor and $24 per barrel ceiling. At the floor price, FoB price of LNG would be $2.02 per mmbtu while at ceiling it would cost $3.03 per mmbtu.

RasGas has also agreed to match its price with any long-term supplier of LNG like Royal Dutch/Shell, they said.