State-owned gas utility GAIL (India) Ltd on Friday (November 29) said it has entered into a long-term time charter contract with Kawasaki Kisen Kaisha Ltd (“K” LINE) for a newly built LNG ship.

The agreement, facilitated through a Singapore-based ship-owning company, is part of GAIL’s strategy to expand its fleet of LNG carriers and strengthen its presence in the global LNG market. “K” LINE has expertise of 40 years in LNG transportation. The vessel is expected to commence operations in 2027.

The LNG ship will be a modern two-stroke vessel having a tank capacity of 1,74,000 cubic metres and will be built by Samsung Heavy Industries Co Ltd, Korea with which ship owning company has concluded a shipbuilding contract.

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“This is the first long-term time charter contract between GAIL and “K” LINE involving a newly built vessel which is expected to be engaged in the transportation of Liquified Natural Gas (LNG) for GAIL in 2027,” GAIL (India) said.

GAIL currently has four LNG vessels, GAIL Bhuwan, GAIL Urja, Grace Emilia and Maran Gas Pericles, to transport natural gas in a supercooled form. Two more ships are expected to join the fleet next year including one newly built vessel on long-term charter.

“GAIL has a diversified sourcing portfolio for over 15 MMTPA which includes supply sources from various geographies both on FOB and DES basis. The company’s LNG fleet is deployed to lift volumes contracted on an FOB basis primarily from the North American region and is transported to meet the domestic demand as well as international customers,” the company added.

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Shares of Gail (India) Ltd ended at ₹198.75, up by ₹1.90, or 0.97% on the BSE.