Petronet LNG to get gas from Australia
Petronet LNG, a joint venture promoted by state-owned energy majors, is hopeful of signing a long term agreement by May with Australia for the supply of 2.5 million tonnes of liquefied natural gas (LNG) for its upcoming terminal in Kochi.
"By May, we hope to sign the agreement with Australia for supply of 2.5 million tonnes of LNG. We will pay international prices for the LNG," said P Dasgupta, CEO and managing director of Petronet LNG, on the sidelines of an oil and gas conference organised by The Energy and Resources Institute (TERI) on Friday.
The LNG supply could come either from Gorgon in Australia, or an ongoing northwest shelf LNG project there.
At first, LNG from a proposed 10 million tonnes per annum Gorgon project is likely to flow in 2010, with a final investment decision expected this year, according to officials of Chevron, which has a holding interest in Gorgon.
Though Petronet has commitments from Qatar for 2.5 million tonnes LNG for the Kochi terminal, expected to be ready by 2010, it is planning to divert the longterm committed supplies scheduled to begin from 2009 to its 5 million tonnes capacity terminal at Dahej, Gujarat.
Petronet plans to eventually double the capacity of the Kochi terminal.
In the case of Dahej terminal, which is already receiving 5 million tonne LNG supplies from Qatar's Rasgas, plans are afoot to raise the capacity to 12.5 million tonnes per annum, said Dasgupta.
"The expanded re-gasification facility is likely to be ready by December 2008," he said.
As Dahej can now process up to 6.25 million tonnes LNG despite its installed capacity of 5.0 million tonnes, Petronet is in talks with Qatar for "additional 1.25 million tonnes of LNG, either on spot, short term or medium term basis, for immediate delivery," said Dasgupta.
Underlining that LNG prices are unlikely to come down to the level of below $3 per million British thermal unit (MBTU), the official said they are moving fast to clinch the agreement now to make use of the small window of opportunity in 2010-12 when some global production is set to scale up.
Despite the higher price the domestic consumers would have to pay, Dasgupta is confident that there would be no difficulty in getting buyers considering the higher cost of alternate petroleum fuels.
The company is in talks with gas users such as National Thermal Power Corporation, Cochin Refineries, Fertilizers and Chemicals Travancore (FACT) and other industrial units for off take of supplies from the Kochi terminal.