The Petroleum and Natural Gas Regulatory Board (PNGRB) is working on a policy that will allow companies to use the unutilised capacity in the country’s liquefied natural gas (LNG) terminals.
India is planning to increase its LNG regassification capacity by over five times to around over 40 million tonne per annum (mtpa) from the current 7.5 mtpa. The two LNG regassification terminals currently in operation in Gujarat are running at full capacity as the country’s gas supply from domestic fields is unable to meet growing demand.
“We are working on the policy,” said a member of the PNGRB, without disclosing further details. Another member of the regulatory board said the companies would get access to LNG regassification terminals at rates negotiated with the owners of the terminal.
However, India’s plans to set up 40 mtpa of LNG regassification capacity by the end of 2012-13 may not come up as long-term LNG contracts are not available currently. LNG suppliers around the world have already booked their capacities and no new liquefaction capacity is expected to be commissioned till 2012.
| LNG REGASSIFICATION CAPACITIES | |||
| Location | Initial capacity | Expanded capacity | |
| Existing | |||
| Petronet LNG | Dahej | 5.0 | 10.0 |
| Shell | Hazira | 2.5 | 3.5 |
| Proposed | |||
| Petronet | Kochi | 2.5 | 5.0 |
| GAIL | Dabhol | 5.0 | - |
| GSPC-Adani | Mundra | 10.0 | - |
| ONGC-MRPL | Mangalore | 5.0 | 10.0 |
| IOC | Ennore | 2.5 | 5.0 |
India currently has two LNG regassification terminals. One is operated by Petronet LNG while the other is operated by Shell Hazira, a joint venture between European oil majors Royal Dutch Shell and Total. While Petronet imports LNG primarily through term contracts, Shell imports LNG only from the spot market.
Both the terminals are operating at their full capacities, representatives of the companies said.
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Gas-rich countries such as Algeria and Qatar liquefy their gas and transport the liquefied gas to consuming countries in cryogenic ships at temperatures under 169 degree Celsius. These gas-rich countries, however, sell some LNG on a spot basis, which is primarily bought by countries such as Japan, South Korea and India.
Analysts also say that India may not need to import LNG in large quantities when the gas from the fields in the Krishna-Godavari basin in the country’s east coast comes on stream. India’s demand for gas is currently double the availability. Imported LNG constitutes around 40 per cent of the available gas.