India’s largest SPOT LNG importing company, Petronet LNG Ltd is planning to set up another terminal at East coast of India after Dahej & Kochi success. Dahej is already importing more than 50 percent of LNG to India from Qatar whereas Kochi will be going to start by this year october.
After 100th board meeting over at Kochi, company announced about expansion project in East. Third terminal will be coming up at Gangavaram in Andhra Pradesh.
Petroleum secretary and Petronet LNG chairman G C Chaturvedi said the 100th board meeting of the company held in Kochi on Friday has given authorization for the project. It has hired French based consultant Tractabel for preparing the detailed feasibility report on terminal set up. The total cost estimated for the entire project (5 million tones capacity terminal) will be Rs 4500 crore. Petronet LNG managing director A K Balyan said higher increase in net profit is on account of additional volumes with better margins along with higher operational efficiency. As per Mr. Balyan, the terminal will have to buy from the spot market till then. Though the long-term supply prices is $ 16 per mmbtu, it will be still feasible for companies using feedstock naptha or furnace oil, he said.
Kochi terminal will be ready by July & full-fledged operational in October. The terminal has already signed long-term agreement for the supply of about 1.5 million tones of LNG from Gorgon in Australia from 2015.
Worlwide LNG trading started in mid 60’s and had increased rapidly & expanding markets across the globe. World trade in LNG is currently in the range of about200 BCM. The major exporting countries of LNG are Algeria, Qatar, Indonesia, Malaysia, Australia, whereas, the major importers are Japan, South Korea, Taiwan and Western Europe. BP Plc reports highlights Japan & Korea are the chiefly importing LNG in Asia & world. Spain & Britain are the next emerging players in the Europe.
Being located at strategic location cum strong reserves even no major exploration or technology up gradation took place in country, had forced govt. to switch towards LNG imports to full fill energy crisis & demands. India is relatively close to four of the world’s top five countries in terms of confirmed gas reserves, viz. Iran, Qatar, Saudi Arabia and Abu Dhabi. The large natural gas market of India is a key attraction to the LNG exporting countries. In order to encourage & promote gas imports in the region, the Government of India has kept import of LNG under Open General License (OGL) category and has permitted 100% FDI. With this approach, Petronet a state-owned company was set up to operate LNG imports in India at Dahej Gujarat.