Petronet LNG to source gas from Australia

Petronet LNG Ltd is expecting to sign a long-term agreement by May with Australia for supply of 2.5 million tonnes (mt) of liquefied natural gas (LNG) for its upcoming terminal at Kochi. This is even as the company is negotiating with other countries for more supplies.

Mr P. Dasgupta, CEO and Managing Director of Petronet, indicated on the sidelines of an Oil and Gas Conference here that the company would pay international prices for the LNG. The supply could come either from Gorgon in Australia, or an ongoing North West Shelf LNG project.

Though Petronet has commitments from Qatar for 2.5 mt LNG for the Kochi terminal, expected to be ready by 2010, it is planning to divert the long-term committed supplies scheduled to begin from 2009 to its 5.0 million tonnes capacity terminal at Dahej, Gujarat. Petronet plans to eventually double the capacity of the Kochi terminal.

As regards Dahej terminal, which is already receiving 5.0 million tonnes LNG supplies from Qatar's Rasgas, Mr Dasgupta said that plans are afoot to raise the capacity to 12.5 mt per annum. "The expanded regasification facility is likely to be ready by December 2008," he said. Since Dahej can process up to 6.25 mt of LNG despite its installed capacity of 5.0 mt, Petronet is in talks with Qatar for additional 1.25 million tonnes of LNG, either on spot, short-term or medium term basis, for immediate delivery, he added.

Stating that the LNG prices are unlikely to come down to the level of below $3 per million British thermal unit, he said the company was moving fast to clinch the agreement now to make use of the small window of opportunity in 2010-12 when some global production is set to scale up.

Despite the higher price the domestic consumers would have to pay, Petronet is confident that there would be no difficulty in getting buyers considering the higher cost of alternative petroleum fuels.

Source: The Hindu, New Delhi, March 24, 2006
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