Gujarat team for Gulf to spot LNG project ally

A state government team led by minister of state for energy and petrochemicals Saurabh Dalal will soon visit a number of Gulf countries to rope in a partner for the third liquefied natural gas (LNG) terminal in Gujarat.

The team, which is scheduled to leave on December 10, will hold discussions with companies based in Oman, Dubai and Qatar, said a government source.

"Gujarat has been at the forefront in the field of gas projects. The state would like to play a major role in tapping new sources of energy. The team led by energy minister Saurabh Dalal will explore the possibilities of partnerships to develop a third LNG terminal in Gujarat," chief minister Narendra Modi said at the inaugural function of EnConvergence 2004, a two-day conference on energy which began on Friday at the Indian Institute of Management, Ahmedabad.

India's only operational LNG terminal is being run by Petronet LNG at Dahej in Gujarat. The second LNG terminal is coming up at Hazira which is being developed by Shell Hazira. The state government is also in search of a partner to set up a third LNG terminal.

Discussion with the Qatar-based RasGas is on cards for the development of this project. RasGas is the supplier of LNG for Petronet LNG at Dahej.

The third LNG terminal was planned to be set up at Pipavav in Amreili district. But British Gas, which was assigned to develop the terminal at $550 million, backed out in December 2003 because of 'no economic' feasibility of the project. The company had invested around $20 million at the proposed terminal site.

"It would be too early to state which companies we will meet and finalise deals. It is all being worked out at present," Dalal said.

State government sources were tightlipped on which location has been identified for the third LNG terminal.

However, Gujarat State Petroleum Corporation Ltd (GSPC) managing director D J Pandian hinted that the third LNG terminal could be either at Pipavav or Mundra in Saurashtra.

"The proposed third LNG terminal could either be at Pipavav or Mundra or both," he said.

While Petronet's Dahej terminal has a capacity of 2.5 million metric tonne per annum (MMTPA), the company plans to expand the capacity to 5 MMTPA by April 2005 and to 10 MMTPA at a later stage.

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Gas hunt

• State government team to hold talks with companies in Oman, Dubai and Qatar
• The state government is in search for a partner for the third LNG terminal
• GSPC managing director says the third LNG terminal could be either at Pipavav or Mundra