IndianOil may buy LNG from Exxon
New Delhi   14-Apr-2008
<b>Seeks Gas On Long-Term Contracts From Papua New Guinea Project</b> IndianOil is in talks with Exxon Mobil to buy 2.5 million tonnes of liquefied natural gas (LNG). IndianOil seeks to buy the LNG on long-term contracts from Exxon's Papua New Guinea project. Exxon holds 41.1% in the $10-billion venture. IndianOil is learnt to be negotiating a price of $6 per mmbtu, when the international LNG price is hovering over $ 10 per mmbtu. India recently brought LNG from the spot market at price of $19 per mmbtu. 'The LNG would be imported to our LNG terminal at Ennore that is being setting up. IndianOil and Petronet is jointly pursuing to buy LNG from Exxon Mobil so that we do not approach the same seller, and end up paying higher prices/IndianOil planning and projects director B M Bansal said. The company aims to seal the deal by the end this year. IndianOil owns 12.5% stake in Petronet LNG (PLL), which operates 5 mmtpa at LNG terminal in Dahej. Petronet and IndianOil are also in talks with Ras Gas of Qatar to buy additional LNG for the Dahej terminal. Exxon has 2 5 % stake in Chevron's proposed Gorgon LNG project in western Australia and leads a group set to start initial engineering and design work on an LNG plant in Papua New Guinea. IndianOil may also be interested in buying 10% stake in the Papua New Guinea venture once Australian power retailer AGL Energy decides to exit the venture. According to a McKinsey report likely to be released on Monday, in the next 12 years, global consumption of natural gas is likely to grow at a CAGR of 2.7% from 2,600 BCM in 2005 to 3,900 BCM in 2020. Rapid economic growth will make Asia the fastest growing region in the world as consumption accelerates by 5.8% year-on-year from 2005 to 2020. LNG will meet about one-third of Asia's natural gas requirements by 2030. <b>Wants 1/3rd of RIL's KG basin gas</b> After its failed attempts to source gas directly from Reliance Industries (RIL) block in the Krishna Godavari basin, IndianOil has approached ^ the government seeking 23 mmscmd (dose to one-third) of gas from the KG basin for ; rte various gas-based projects. Confirming the move, IndianOil chairman and managing director Sarthak Behuria said; "We have written to the government seeking 23 mmscmd of gas for our various gas-based projects." RIL is likely to pump over 80 mmscmd of gas from KG basin in the next couple of months.