GAIL, “K” LINE, J M Baxi Sign Term Sheet for Shipping Equity
Filing Summary
GAIL (India) Limited, “K” LINE, and J M Baxi Marine Services have signed a term sheet for equity participation in a Singapore-based ship-owning company. The agreement includes a long-term charter for an LNG vessel under construction in Korea, set to commence in 2027. GAIL’s investment will be made through its subsidiary, GAIL Global IFSC Limited, pending DIPAM approval. This collaboration aligns with India’s energy strategy and the “Aatmanirbhar Bharat” initiative. The partnership aims to enhance LNG shipping capabilities, supporting India’s transition to cleaner energy sources.
GAIL (India) Limited, Kawasaki Kisen Kaisha, Ltd. (“K” LINE), and J M Baxi Marine Services have entered into a term sheet for equity participation in a ship-owning company based in Singapore. The agreement was formalized in the presence of Shri Hardeep Singh Puri, Minister for Petroleum and Natural Gas, Government of India. This collaboration involves a long-term charter agreement for an LNG vessel, which is currently under construction in a Korean shipyard, with operations expected to commence in 2027.
The financial terms of the agreement include GAIL’s investment in the ship-owning company through its wholly owned subsidiary, GAIL Global IFSC Limited, located in GIFT City, Gujarat. This investment is subject to approval from the Department of Investment and Public Asset Management (DIPAM). The specific financial figures and equity percentages involved in the transaction have not been disclosed in the filing.
The operational scope of the agreement involves the construction and chartering of an LNG vessel. This vessel is part of GAIL’s strategy to secure reliable energy transportation capabilities. The vessel is being constructed in a Korean shipyard, and the charter agreement will enable GAIL to enhance its LNG shipping capacity. This initiative is in line with the Indian government’s “Aatmanirbhar Bharat” initiative, aiming to increase domestic ownership and capabilities in the shipping sector.
The market context for this agreement is rooted in India’s growing demand for natural gas and the strategic importance of LNG shipping in the country’s energy mix. As India seeks to increase the share of natural gas in its energy consumption, LNG shipping plays a critical role in ensuring energy security and supporting the transition to cleaner fuels. This partnership is expected to contribute to the development of a resilient and sustainable LNG shipping platform for India.
The timeline for the implementation of this agreement includes the commencement of the long-term charter in 2027. The involved parties, GAIL, “K” LINE, and J M Baxi Marine Services, will collaborate to ensure the successful execution of the project. The construction of the LNG vessel is currently underway in Korea, with the charter set to begin upon its completion.
“K” LINE is a major Japan-based shipping and transport company with a fleet of around 450 vessels, including 47 LNG vessels. The company is involved in marine transportation and related business fields, providing expertise in safety, technical operations, and energy delivery.
GAIL (India) Limited is India’s leading natural gas company, with interests across the natural gas value chain, including trading, transmission, LNG shipping, and renewable energy. The company operates a vast network of natural gas pipelines and holds a significant market share in gas transmission and trading in India. GAIL is also expanding its presence in renewable energy sectors such as solar, wind, and biofuel.