IOC seeks ally for LNG shipping venture

Indian Oil Corporation (IOC) plans to enter the entire chain of natural gas business right from exploration to marketing. As part of this plan, it is scouting for a joint venture partner for floating a liquefied natural gas (LNG) shipping company.

N K Nayyar, director, business development, on being asked whether the company would and may go in for bidding for LNG shipping contract for Petronet LNG Ltd, said the company was looking for a partner.

Refusing to divulge the names of shipping companies with whom IOC was in touch, he said that they were pursuing business in upstream, downstream as well as shipping of gas.

IOC is setting up a LNG import terminal at Ennore in Tamil Nadu for which it is likely to open a dialogue with Malaysian company Petronas.

The two companies were earlier planning to set up a LNG terminal in Kakinada in Andhra Pradesh but the project was shelved after the discovery of gas off Andhra coast.

IOC had last month signed a memorandum of understanding with Iran's Petropars for jointly developing a proposal for the South Pars field. The gas could be received at the Ennore terminal which is expected to initially have a capacity of 2.5 million tonne per annum, said an official.

"We have tied up gas offtake agreements with prospective buyers," said Nayyar. About 0.8 mt gas would be utilised by the Chennai refinery of IOC.

Among those with whom IOC has signed agreements are power companies in Tamil Nadu. IOC is engaging consultants for conducting detailed feasibility report for the terminal.

Tractbel had earlier done a detailed technical study for locating the terminal. Among the port locations studied were Krishnapatnam in Andhra Pradesh and Thirukaddaiyur and Manappad ports in Tamil Nadu.