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Brinkmanship by GAIL-II: Is it failing to cope?
Aug 09: The International Energy Agency, which in 2011 predicted a ‘golden age of gas’, now sees a more tepid picture. Demand for gas is not going up in the segments in which it was meant to in the manner thought earlier. Suppliers are now banking on new countries to push demand whereas, earlier, a more intensive use of gas was meant to stir up demand in countries where gas usage was already prevalent.
8The fundamental problem with GAIL is that it did not adapt to the changing environment.
8The new LNG world demanded a diversity of approaches and business models and GAIL failed to develop them while other LNG players, such as Shell and BP, did.
8Diverse portfolios -- whether as trader or buyer -- were the need of the hour to manage price risks.
8GAIL failed on this count, as its only option was to get the LNG to India.
8What GAIL needed to do was to staff up its risk and economic forecasting departments, as others had done as they ventured beyond the traditional way of doing the LNG business.
8From the old model of arbitraging cheap gas, the new world required participants to be market-finders and market-makers.
8The best companies were seizing opportunities proactively whereas GAILwas not.
8Trends show LNG players -- both traditional giants, and new entrants from state concerns to small entrepreneurial firms --  not just adapting to a changing reality, but creating their future.
8GAIL is a long way behind.
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