The Emir of Qatar will kick off the construction for the first-ever liquefied natural gas (LNG) plant to supply gas to a domestic company Petronet LNG on Monday, January 14. The Emir will lay the foundation of RasGas' Train III LNG liquefication plant at Qatar.
A senior official with Petronet LNG said the company is now in talks with RasGas to pick up a nominal equity in the Train III liquefication plant which is being build for $1.6 billion at Qatar. The cross holdings is expected to ensure steady supply of gas to Petronet LNG.
RasGas has entered into a 25-year sales contract with Petronet LNG to supply 7.5 million tonne of LNG - five million tonne at Dahej and 2.5 million tonne at Kochi. The first gas from the Train III plant is expected to arrive at Petronet LNG's Dahej terminal in December 2003.
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Petronet LNG has already awarded the EPC contract for the Dahej project to Iishikawajima-Harima Heavy Industries Company of the Japan-led consortium and a time charter agreement (the shipping contract) to Mitusi OSK-Lines led consortium. The latter has in turn awarded contracted to a Korean company to build two LNG carriers.
Petronet LNG is being promoted by four state-owned oil and gas majors - Oil and Natural Gas Corporation, Indian Oil Corporation, Bharat Petroleum Corporation and Gas Authority of India. They hold 12.5 per cent equity each in the LNG venture. Besides Gaz de France has also picked up 10 per cent equity for Rs 120 crore. The French major is the technical and project consultant to the company.
With gas supply contract in place, the company is now awaiting a clear pricing policy for imported LNG. The ministry of petroleum and natural gas has recently mooted a proposal for pooling price of regassified LNG imported by Petronet LNG with the price of natural gas from indigenous gas producers.
The ministry is of the opinion that the composite pricing will facilitate availability of gas at a uniform price to existing as well as new customers.
The other private LNG players are Shell which is setting up a LNG terminal at Hazira, while British Gas is setting up a similar facility at Pipavav in Gujarat.