BG eyes tie-ups for gas storage, supplies

Close on the heels of dropping the plan of constructing a $550 million LNG terminal at Pipavav in Gujarat, the BG group is looking at tying up with other terminal owners for storing its gas for a fee.

Further, the company is planning to tie-up with pipeline owners down the line for selling gas to user industries such as power and fertiliser.

"This makes sense as already one terminal is ready, another slated to come-up next year while a third too can come up soon. We are exploring this option but no final decision has been taken on this issue," Nigel Shaw, CEO, BG India said.

He added that the company was not in talks with any of the LNG players at present. A 2.5 million tonne terminal has already come up at Dahej in Gujarat while global major Shell is planning to set up another terminal at Hazira in the state next year.

Further, the LNG facility which was envisaged as a part of the Dabhol power project is near completion and can be activated soon after the problems are sorted out.

In fact, BG group is developing a LNG supply project in Iran which when operational is targeting India as a possible market.

The BG group had decided against going ahead with the Pipavav project anticipating a glut in LNG terminal capacity by the time it is ready with its terminal in 2007. Further, this would have also allowed customers to lock into LNG supply contracts with other suppliers.

The BG group has identified India as a thrust area alongwith Brazil.

Further, with the passage of the Electricity Act 2003, the BG group is planning to set up a 100 mw power plant through its subsidiary Gujarat Gas based on the co-operative model.