Metropolis Gas Company (Metgas), the wholly owned Enron subsidiary, has inked a liquefied natural gas (LNG) supply agreement with global major Malaysia LNG, a subsidiary of Malaysian public sector oil giant Petronas.
Under the terms of the deal, Metgas will import 2.6 million metric tonne per annum (MMTA)of LNG from the Malaysian company for 20 years.
The two sides signed a confirmation of intent on Wednesday at Kuala Lumpur, according to industry sources.
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The agreement was signed by David Haug, chairman and chief executive officer of Enron's LNG business, and M H Harican, president and chief executive officer of Petronas.
Enron India's chief executive officer Sanjay Bhatnagar, too, was present at the signing ceremony.
Enron confirmed the signing of the agreement but refused to divulge further details.
This is the first time that an agreement has been inked for supply of LNG from Malaysia to India.
The first consignment will arrive by mid -2002.
Metgas has been set up by Enron to distribute and market gas in India. The company will also lay the pipelines from the nodal point Dabhol in Maharashtra to other regions in the west coast.
The signing of this agreement has seen Enron tie up a total of 4.7 mmta of LNG for its ventures in India.
Enron is setting up the 2,184 mw Dabhol power project in Maharashtra.
It has already commissioned the 740 mw first phase of the project. It has also attained financial closure for the 1,444 mw, second phase. The first phase will use either naphtha or distillate, while the second phase will be entirely LNG fired.
Phase I of the project, too, will migrate to LNG after the commissioning of the second phase. The two phases together require about 2.3 MMTA of LNG.
Enron already has in place an agreement for importing 2.1 million tonne of gas from Oman and Adgas.
The balance gas will be distributor through a pipeline network to Northern Maharashtra , Goa and Karnataka.
Metgas has identified a market potential of 4 MMTA in Maharashtra and 2.5 MMTA in Karnataka and Goa.
Initial customers will be leading power, fertiliser and other industries. Gas sale agreements with these companies are at an advanced stage, sources said.
Malaysia's transnational Petronas holds 60 per cent in Malaysia LNG. The balance 40 per cent is distributed between Shell, Nippon Oil, the Sarawak