ONGC may source LNG from Rasgas

Talks on for Mangalore project supply

Oil and Natural Gas Corporation (ONGC) is in talks with Rasgas of Qatar for sourcing 10 million tonnes of Liquefied Natural Gas (LNG) for its Rs 25,000 crore Mangalore project that includes setting up of a 2,500 MW power plant and a petrochemicals complex.

"Initial discussions with Rasgas have been held at New Delhi and Doha. A Rasgas team has done an assessment and the deal is likely to take place soon," ONGC sources said.

ONGC proposes to invest Rs 5,000 crore by 2008 in setting up a 10 million tonnes LNG import and re-gassification plant and Rs 1,100 crore in a plant to extract c2/c3 (ethane/propane) and Liquefied Petroleum Gas (LPG) from LNG at Mangalore port.

Around Rs 9,000 crore is planned for setting up of a dual feed petrochemical complex at Mangalore based on c2/c3 extracted from LNG and naphtha from Mangalore Refinery and Petrochemicals Ltd (MRPL) (a subsidiary of ONGC).

Sources said ONGC plans to use 1.5 million tonnes of LNG for the 1,445 MW, Rs 3,200 crore power plant at Mangalore's special economic zone (SEZ).

Besides, Rs 3,500 crore is lined up for a power plant at Ennore in Tamil Nadu. Pipelines to Ennore, Kochi and Goa will be laid from Mangalore, at a cost of around Rs 2,000 crore, for the supply of lean gas to industries in Tamil Nadu, Kerala and Goa.

"The LNG import and re-gassification terminal, c2/c3 and LPG recovery plant, petrochemical complex and power plant will come up in the special economic zone (sez) notified by the Karnataka government in and around Mangalore," sources said.

ONGC, whose subsidiary MRPL will also fall in the notified zone, will be the co-promoter of the SEZ," sources said.

Out of 10 million tonnes per annum of LNG which ONGC plans to import from Qatar, 1.8 million tonnes will be consumed in extracting c2/c3 and another 0.5 million tonnes may be used in MRPL.

Besides, re-gassified lng will also be supplied to Mangalore Fertiliser and Chemicals Ltd and other privately owned power projects in Karnataka.

The planned petrochemical complex at mangalore will be the first in southern india, which at present gets its polymer requirement from west/north/east.

Sources said the mangalore-bangalore-ennore pipeline will transport re-gassified lng to karnataka power's 1400 mw bidadi power plant, for which ongc is one of the bidders for supply of fuel (gas). The pipeline will also supply gas to ennore project, which the tamil nadu government is assigning to ongc.

Rasgas is already supplying 5 million tonnes of lng to petronet lng ltd's dahej project in gujarat at a landed price of 2.79 dollars per million btu (british thermal unit), they said adding a price lower than that was being negotiated for mangalore.

Project financials

• The project includes setting up of a 2,500 MW power plant and a petrochemicals complex in Mangalore.
• ONGC proposes to use 1.5 million tonnes of LNG for the 1,445 MW, Rs 3,200 crore power plant.
• Pipelines to Ennore, Kochi and Goa will be laid from Mangalore, for supply of lean gas to industries in Tamil Nadu, Kerala and Goa.