After securing almost a third of a giant gas field in Mozambique, India today pitched for buying most of the natural gas from the project to feed its starving power plants back home.
Mozambique plans to produce 34 million tonnes of liquefied natural gas (natural gas turned into liquid by freezing at sub-zero temperatures) from the Rovuma Area 1 offshore block, where ONGC Videsh Ltd, Oil India Ltd and Bharat Petroleum Corp Ltd (BPCL) hold 30 per cent interest.
The LNG to be produced by end of 2018 equals to 136 million standard cubic meters per day of gas, 50 per cent more than India's current gas output.
Continuing to use the sidelines of the Petrotech 2014 conference to forward oil diplomacy, Oil Minister M Veerappa Moily courted his Mozambique counterpart Esperanca Bias to seek a pie of the LNG.
"We have 18,000 MW of power plants lying idle due to gas shortage and another 10,000 MW in pipeline for commissioning. We need gas and we can buy a big chunk of Mozambique LNG," he said.
The Mozambique minister sought to know a firm quantity that India was willing to buy but Moily only indicated an initial assessment of a requirement of 15-20 million tonnes.
"We are working on a memorandum of understanding which will detail all these things. The MoU has been circulated and once it is finalised, I plan to travel to Mozambique for a formal signing," Moily said.
Earlier this month, ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) completed the acquisition of 10 per cent stake in a giant Mozambique gas field for USD 2.475 billion.
Additionally, OVL bought US energy major Anadarko Petroleum's 10 per cent stake in the same block for USD 2.64 billion.
A unit of BPCL already has 10 per cent stake in Area 1 which covers about 2.6 million acres in the deepwater Rovuma Basin and represents the largest gas discovery in offshore East Africa, with recoverable reserves estimated at 35 to 65 trillion cubic feet.
Gas from Area-1 as well as a neighbouring block will be converted into liquefied natural gas (LNG) for exports.
"The Area 1 LNG project is strategically located to competitively supply LNG to India," Moily said.
The MoU seeks to accelerate cooperation between the two nations in hydrocarbon sector. "We need to expedite the signing of this MoU as soon as possible," he said.
New Delhi will put a firm number to its demand once it gets an assessment of gas requirement from marketers like GAIL India Ltd and Petronet LNG.
