Petronet may source 1.25 mt LNG from Qatar

Petronet LNG Ltd (PLL) is likely to source 1.25 million tonnes of liquefied natural gas from Qatar.

Confirming that negotiations were in process with Qatar, official sources here said, "A meeting was held with the Qatari company in Dubai on October 30, where it was agreed that PLL would source 1.25 mt of LNG."

"Currently, discussions on pricing were under way," sources added. Petronet would receive the 1.25 mt of LNG at its Dahej terminal. India currently has a contract to buy 7.5 mt of LNG a year from Qatar. However, the current supply from Qatar is only five mt.

Petronet has a 25-year contract to buy LNG from Ras Laffan Liquefied Natural Gas Co Ltd II (RasGas II), a joint venture between the state-run Qatar Petroleum and Exxon Mobil. Through this contract, Petronet currently imports five mt at its Dahej terminal in Gujarat and would start importing 2.5 mt more from 2009.

Asked whether this 1.25 mt was part of the 2.5-mt LNG expected from Qatar in 2009, the official said, "This 1.25 mt of LNG was an additional short-term contract and not part of the already contracted 2.5 mt."

Last month, India requested Qatar to raise the LNG supply to 17.5 mt. After the meeting with the Qatar Finance Minister, Mr Yusuf Hussain Kamal, the Petroleum Minister, Mr Murli Deora, had sought 10 mt of additional LNG supply.

"Their response was very positive and the LNG could be brought to Kochi, Ratnagiri and Mangalore LNG terminals," the Petroleum Minister had said.

FCCB issue

As regards status on the offer made to Qatar to pick up Petronet's $100-million foreign currency convertible bonds (FCCB), which upon conversion into equity shares would translate into 7.5-12.5 per cent equity stake, the official said that Qatar Investment Agency (QIA) was expected to conduct due diligence shortly.

Reiterating that the two deals - supply of more gas and picking up equity - were independent of each other, the official said, QIA is now looking at investing in energy-related projects in India.

Source: Business Line, New Delhi
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