GAIL seeks LNG supply deal for Ratnagiri Gas

To source gas from Oman LNG and Qalhat LNG.

GAIL India plans to enter into a long-term liquefied natural gas (LNG) sourcing contract with Oman LNG and Qalhat LNG to shore up supplies to various projects including Ratnagiri Gas and Power (RGPPL). Officials from the petroleum industry are likely to visit Oman next month, highly placed sources said.

"Minister of state in the prime minister's office Prithviraj Chavan and Prashanto Banerjee, chairman and managing director, GAIL, visited Oman last week and conveyed India's interest in getting oil and gas from there. Prime Minister Manmohan Singh has also asked the officials to take immediate steps to avoid any delay in finding the right partner," a top petroleum ministry official said.

As the deadline for the commissioning of LNG-fired Ratnagiri Gas project is fast approaching, GAIL has expedited talks with prospective gas majors.

GAIL holds 28.3 per cent stake in Ratnagiri Gas and Power.

According to sources, preliminary talks between both the countries are over now. Once both the parties reach consensus on pricing, the deal will be signed.

"Other companies in the fray for a supply deal with GAIL are North West Shelf of Australia, Petronas of Malaysia, BPMIGAS of Indonesia, Brunei LNG, AdGas, RasGas of Qatar and Sonatrach of Algeria," source said.

The $2 billion Oman LNG plant is based in the port city of Qalhat, near Sur. Qalhat LNG, another company targeted by GAIL, is a joint stock company owned by the Sultanate's government (55.84 per cent), Oman LNG LLC (36.8 per cent) and Union Fenosa Gas (7.36 per cent).

Qalhat LNG plant is being built adjacent to the Oman LNG Qalhat, allowing it to share Oman LNG storage, loading and other facilities.

Oman LNG has assured Petronet LNG the availability of 0.6-0.8 million tonne (MT) LNG in 2006, 1.0-1.2 MT in 2007 and 1.6-1.8 MT per annum from 2008 onwards. But the deal has not been finalised.