The Telegraph
Since 1st March, 1999
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LNG import to double

New Delhi, Nov. 14: Indian Oil Corporation, Bharat Petroleum Corporation and Gail (India) Ltd are keen to double the liquefied natural gas import capacity at the Dahej terminal in Gujarat from 5 million tonnes to 10 million tonnes a year.

Disclosing this here today, petroleum secretary B. K. Chaturvedi said marketing the more expensive LNG would not be a problem.

The statement assumes importance as major buyers of gas such as National Thermal Power Corporation have not entered into any agreement for buying LNG as yet.

The gas will be imported in liquid form from Rasgas in Qatar on board cryogenic ships and then reconverted into gas at the Dahej terminal before it is fed into the Gail pipeline. The first consignment of the gas is expected to arrive in January next year. The project has been undertaken by Petronet LNG, a company floated by IOC, BPCL and GAIL.

The power and fertiliser companies have been complaining that the price of the gas should not be above $3 per million British thermal units (Btu) as the price of electricity and fertiliser in the country is regulated. These companies are presently using gas from the ONGC and Oil India fields which are provided at cheap prices.

However, Petronet is targeting power and fertiliser units that are currently using naphtha which costs more than LNG. The price of the imported gas is cited at around $4 per million Btu. Under the initial contract with Rasgas signed when Vazapathi Ramamurthy was the petroleum minister the price of the gas from Rasgas was working out to be around $5 per million Btu. This had scared away potential buyers and then Rasgas was urged to scale down the price.

Petronet has also stated that it was ready to match the lowest price for natural gas offered by any private competitor. In other words, if any other company such as Shell sold the gas at a price of $3.5 per million Btu it would bring down its price further.

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