Petronet plans $1 billion LNG plant on India's east coast

Petronet LNG, a private company promoted by state-run oil companies, plans to invest $1 billion in setting up a facility to import gas in ships on the east coast, CEO Ashok Kumar Balyan said on Wednesday, Indiatimes reports. The terminal, the company's third facility, will be located in either Andhra Pradesh or Orissa and have a capacity to import up to 5 million tonne a year gas in its liquid form (LNG) and re-convert it into gaseous form."The board of Petronet on Wednesday approved a detailed feasibility report (DFR) on the new terminal," Balyan said. The report is expected to be ready by year-end, and investment approval is likely by early next year. "It will take 46-48 months to build the facility," he added. Petronet operates a 10-million tonne a year terminal at Dahej in Gujarat, which is being planned to be expanded to 15 million tonne. "The board has also approved expansion of the Dahej terminal at a cost of around $280 million," he said. The incremental capacity will be leased out to company's promoters, state-run gas utility GAIL and Gujarat State Petroleum Corporation. The two firms will import their own LNG and pay Petronet a fee for using its facility. "We have proposed a unique financing scheme for the expansion wherein GAIL and GSPC will part fund the expansion. Their funding will be adjusted against the tolling charge they will have to pay to Petronet for using its facility."
Petronet is building a 5-million tonne a year facility at Kochi in Kerala, which is likely to be completed by end-2012. Petronet, recently, agreed on an initial pact with Russia's Gazprom to annually buy 2.5 million tonne of LNG."We are in discussions with several major producers for long term LNG contracts," Balyan said.