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Qatar gives hope of another 1 mn tonne LNG

India is already receiving 5 mn tonnes of LNG from Qatar at Petronet Dahej terminal in Gujarat.

india Updated: Feb 09, 2006 13:45 IST

The visit of the Qatar Emir's wife, Sheikha Mozah bint Nasser Al-Missned, to New Delhi this week has revived India's hopes of getting an additional one million tonnes of LNG from the Middle East country at a competitive price.

India is already receiving five million tonnes of liquefied natural gas (LNG) from Qatar at Petronet LNG's Dahej regassification terminal in Gujarat. There is also a long-term Qatar commitment for another 2.5 million tonnes of LNG from 2007 for the Kochi regassification terminal being set up.

"During the dinner hosted by Prime Minister Manmohan Singh for the Qatari Emir's consort, the sheikha had assured that India's request for more LNG would be considered favourably," a petroleum ministry source said.

"A team led by Petroleum Secretary MS Srinivasan would be leaving for Qatar on Sunday to begin negotiations for an additional one million tonnes of LNG for the Ratnagiri power project," the source said.

The talks with Qatar's RasGas managing director are slated for Feb 13 and petroleum ministry officials have also sought an appointment with the Qatar oil minister.

A series of meetings are to take place over the next few months, as India is keen to tie up gas supplies at economic rates for generation of power at affordable rates. India is currently facing a 50 per cent shortfall in gas supplies.

Petroleum ministry officials admit that while LNG supplies are available from some gas-rich countries, the price is considerably higher than the below $3 per million British thermal unit (mBTU) levels India had been negotiating so far.

With European countries willing to pay around $8-$10 per mBTU and the US willing to take supplies at $10-12 levels, the cost of LNG has really shot up at a time when oil prices continue to hover at over $65 per barrel level.

Though Ratnagiri Gas and Power Ltd, formerly known as the Dabhol power project, has an LNG terminal with a five million-tonne capacity, the government is keen to have at least one million tonnes of LNG for revival of the power project by the middle of the year to help bridge the growing power shortage in Maharashtra.

The state is currently facing a shortage of 4,500 MW of power.

Only the availability of LNG supplies at affordable rates would make it possible for the National Thermal Power Corporation and GAIL (India) Ltd - the equity partners of Ratnagiri power company - to supply power to consumers at affordable prices of below Rs 3 per unit.

First Published: Feb 09, 2006 13:42 IST