IndianOil scouts overseas for LNG
New Delhi   08-Dec-2009
In what signifies the Indian industry’s gradual shift from liquid fuels toward natural gas, IndianOil is scouting overseas markets for sourcing 2.5 million tonne per annum (mmtpa) of LNG and also seriously considering reviving its $750 million Ennore LNG re-gasification terminal project, which was put on hold in 2007 after huge gas discoveries were reported in the Krishna-Godavari (KG) basin. Public sector gas marketer GAIL India only last week bought 70 mmscm of LNG in a spot deal even as it has invited expressions of interest (EoI) for long-term supply of LNG. IndianOil is looking at the South India market where KG basin cannot be delivered in the absence of pipeline connectivity. However, the public sector company is mindful of competition from KG basin gas, which is priced at $4.2 mmbtu. IndianOil is already marketing 8 million standard cubic meters per (mmscmd) LNG re-gasified by Petronet’s Dahej terminal. This quantum will go up to 11 mmscmd once Petronet Dhaej capacity expansion project is commissioned in January 2010. Meanwhile, Petronet’s greenfield LNG re-gasification project at Kochi in Kerala is expected to be commissioned by 2012 and after that, IndianOil will have 13-14 mmscmd of re-gasified LNG available for marketing. “In next 2-3 months, we will take a decision if Ennore LNG terminal project is to be revived,” Mr. B. M. Bansal, IndianOil’s Director for Business Development, told reporters on the sidelines of a Ficci conference here today. IndianOil had in 2007 put on hold the project on apprehension that KG basin gas would the render the project commercially unviable. “Once we decide internally, it will take one year to prepare a detailed feasibility report,” he said. Most of the power and fertilisers plants have started shifting from naphtha to natural gas after production started from Reliance’s D6 field in the KG basin this April. The current production from the D6 is 40-mmscmd gases, which will be ramped up to 90 mmscmd.