New Delhi, Jan. 30: Indian Farmers Fertiliser Cooperative Ltd (Iffco) has decided to pick up a 10 per cent stake in a Rs 5,900-crore floating LNG terminal being set up by Nikhil Merchant-led Swan Energy in Gujarat.
Abu Dhabi's National Marine Dredging Company has won the $316-million engineering, procurement and construction contract for the 5-million-tonne (mt) terminal.
Swan LNG is developing the floating storage and regasification unit (FSRU)-based LNG terminal at Jafrabad.
In a stock exchange filing, Swan today said, "Iffco is willing to invest up to 10 per cent of the equity" in the LNG project.
Swan Energy is building the project in a joint venture with Exmar of Belgium, which specialises in such terminals having built the world's first floating unit in 2005.
Nikhil Merchant's Swan Energy holds 51 per cent in Swan LNG and Exmar Marine, holds 38 per cent.
The companies hiring the capacity will import LNG from abroad and pay Swan a tolling fee.
Swan Energy plans to commission a one jetty FSRU at Jafrabad in 2019. It plans to expand the capacity to 10mt through the deployment of a second FSRU.
State-owned Oil and Natural Gas Corporation, Indian Oil Corporation and Bharat Petroleum Corporation have already booked 60 per cent of the capacity of the terminal.
The three companies have signed an agreement to import 1mt of LNG per annum.
The project has set a new milestone in the strategic relationship between India and UAE, which has recently signed a deal under which the national oil company of the Gulf nation will hire half of the capacity of maiden strategic oil storage at Mangalore to store crude.
UAE's Adnoc will stock 0.75mt, or 6 million barrels of oil, in one compartment of the Mangalore facility. Of this, 0.5mt will belong to India and can be used in emergency situations. Adnoc will use the facility as a warehouse for trading oil, officials said.
They said India could use 66 per cent of the 0.75mt crude in times of emergency after paying the prevalent market rate.
India's LNG import terminal capacity to double in nearly six ix years amid rising demand for imported fuel. According to a oil ministry document, country's LNG terminal capacity will likely rise to 47.5 million tonne per annum (mtpa) by 2022 from the current 21.3 mtpa as existing terminals expand capacity and new ones get commissioned.
Demand for gas in India is expected to be driven by refineries, fertilizer and power plants. In 2015-16, the natural gas consumption in the country rose barely 2 percent to 52 billion cubic meters, of which 40 percent was imported as LNG.
However, with global prices ruling low, consumption has soared, rising 14 percent in April, pushed by imports that rose 45 percent. LNG consumption in power sector has increased from the level of 3 mmscmd during April 2015 to a maximum level of 11.47 mmscmd during March 2016.
Currently, there are four LNG terminals at Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in the state of Kerala. Capacity expansion of Dahej LNG terminal is expected from 10 mtpa to 15 mtpa by end of 2016. Further, a firm plan is in place to augment another 2.5 mtpa capacity at Dahej, it stated.
Work to develop a new LNG terminal of 5 mtpa at Ennore in Tamil Nadu is at an advanced stage and two new R-LNG terminals of 5 mtpa capacity each (at Dhamra and Kakinada on the east coast) are also planned to be developed.
