Petronet to double capacity

Likely to purchase gas from National Iran Oil Company of Iran

Even as the Union petroleum minister Ram Naik dedicated the country's first liquefied natural gas (LNG) terminal to the nation here on Monday, the Rs 2600 crore Petronet LNG (PLL) has decided to double its capacity in two years.

The terminal, which now has a capacity of 5 million metric tonne per annum (MMTPA), will double its capacity to 10 MMTPA with an additional investment of Rs 800 crore.

Suresh Mathur, chief executive officer and managing director said, "With the increasing demand for gas, we have found an immense potential for LNG sales and now decided to double the capacity of our existing terminal for which presently a feasibility study is being carried out in detail by PLL. As we will be able to utilise our existing infrastructure, like ports and jetty also for an expanded terminal, PLL will need to invest only Rs 800 crore for doubling its capacity."

PLL, a consortium of Indian Oil Corporation, Gail India, Bharat Petroleum Corporation and Oil & Natural Gas Corporation, has also decided to offer stakes of its expanded terminal to world's largest oil and gas company, Exxon Mobil.

"Though Exxon Mobil, which also has stakes in Qatar-based RasGas, our LNG supplier, showed immense interest in picking up a stake in our existing structure, we could not finally offer them the equity but once our project is expanded, Exxon Mobil will be made an equity partner in PLL," Mathur said.

PLL, which had signed a LNG buying agreement with RasGas in 1999, will be taking 7.5 MMTPA of LNG from RasGas, once the terminal starts operating with a 10 MMTPA capacity, while the deficit 2.5 MMTPA of LNG will be purchased by GAIL Indi Ltd, a stake-holder in PLL, from National Iran Oil Company.

"We have initiated talks with NIOC for buying LNG from them which may be cheaper than that from RasGas and a memorandum of understanding was signed recently. We expect the agreement to be finalised in another three months, following which, in next two years, we will start getting 2.5 MMTPA of LNG from NIOC," said B S Negi, director of PLL and also a director on GAIL board.

With the regasified LNG from Dahej terminal is expected to replace a large volume of luqid fuels during the years to come, PLL officials expect that with the existing capacity, 20 percent of liquid fuel replacement by regassified LNG will save about $2 billion of foreign exchange outgo since LNG is cheaper and cost effective fuel.

"While we have already sold out our entire first consignment of LNG, we are optimistic to earn further revenue for PLL and serve industries which lack clean fuel and gas. LNG from this terminal will also be used by refineries in the country as fuel and feedstock for maximising light and middle distillates such as petrol, kerosene and diesel and the refineries of Indian Oil, Corporation, Bharat Petroleum and Hindustan Petroleum have proposed to use LNG at Koyali, Mathura, Panipat and Mumbai refineries respectively," added Mathur.