ON THE PROWL
New Delhi, April 17: GAIL (India) Ltd and Petronet LNG are jointly exploring opportunities to pick up stakes in Indonesian gas blocks and import LNG from the Southeast Asian nation.
Sources declined to identify the gas blocks being considered since the talks were at a preliminary stage.
Indonesia has the worlds second largest coal bed methane (CBM) reserves. However, the potential identified CBM resource of 453 trillion cubic feet in 11 blocks is largely untapped.
Overall, gas production in Indonesia is expected to rise from an estimated 76 billion cubic metres in 2010 to a peak of 90 billion cubic metres by 2017-20
The two state-owned firms also plan to import LNG from Tangguh Project and are keen on long-term contracts with the producers.
Petronet is looking at the possibility of setting up a facility in the east coast to import LNG and re-gasify it in a partnership with GAIL.
The Tangguh project, owned by the Indonesian government with BP Plc as the operator, has a total capacity of 7.6 million metric tonnes per annum (mmtpa). It supplies gas to China, Korea, Japan and the US.
However, the demand from the US has come down following the availability of shale gas. Indonesia now has 3.70mmtpa of LNG available for diversion.
We want to enter into a long-term contract to meet the growing gas demand in the country, sources said.
Indias LNG imports could rise to 20 million tonnes (mt) by 2017 from 9.3mt in 2010-11.
The country has a long-term contract to import 7.5mt from Qatar. It will begin importing 1.5mt from Australia under another contract from 2014, and is banking on more supplies from both the countries. India is seeking to diversify its sources, officials said.
LNG forms 19 per cent of the countrys gas supply, and the expansion of the countrys pipeline to 30,000km from 10,000km is expected to result in increased demand. Supply from visible sources by 2020 is expected to meet 75 per cent of the projected demand, a study by KPMG said.
Global consultancy firm McKinsey said the current demand of 166 million standard cubic metres per day (mmscmd) of gas — made up of nearly 135mmscmd supplies from domestic fields and imported LNG — is likely to rise to at least 230mmscmd and a maximum of 320mmscmd by 2015.
According to industry projections, Indias total LNG import is estimated to witness a three-fold rise from 48mmscmd in 2010 to 129mmscmd in 2015.
Meanwhile, the government has directed GAIL not to charge for the regasified liquefied natural gas being brought from the spot markets by those entities who have been forced to do with less of natural gas from the KG-D6 fields of Reliance Industries.