Monday July 21, 05:50 PM
Petronet aims for new LNG deal next month |
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NEW DELHI (Reuters) - Petronet LNG hopes to sign a fresh 10-year deal to import up to 3.5 million tonnes a year of liquefied natural gas (LNG), leaving no scope for spot cargoes, the firm's head said on Monday.
"We have got an in-principle approval to pursue (the deal), but we have yet to close it. We only go to the board when we have covered some ground like basic principles of quantity and price have been agreed upon," CEO Prosad Dasgupta told Reuters.
Dasgupta did not say where the LNG would come from or its price. He said more details would be available in a month.
If the new deal is sealed, Petronet would be getting one 62,000-tonne LNG cargo each month from September to December at its Dahej terminal in western India.
"From 2009, it will be 1.8 million tonnes and from 2010 onwards it will increase perhaps to 3.5 million tonnes," he said.
With the new contract, Petronet would have "very little capacity, virtually no space, to absorb spot cargoes until a new jetty is built at the terminal," Dasgupta added.
It halted spot purchases after sealing a short-term deal to buy 1.25 million tonnes from Qatar's RasGas last year.
It also gets 5 million tonnes of LNG a year from RasGas under a long-term LNG deal, which will rise to 7.5 million tonnes from September 2009.
Petronet LNG plans to double capacity at Dahej to 10 million tonnes a year by December next year. Its board on Monday approved a detailed feasibility report on building a second jetty, which Dasgupta said would not be ready before 2010.
State firms Oil and Natural Gas Corp, Indian Oil Corp, Bharat Petroleum Corp Ltd and Gas Authority of India Ltd have stakes in Petronet, which specialises in importing LNG.
India, Asia's third-largest energy consumer, faces a natural gas supply crunch, with booming demand for the fuel far outstripping domestic supplies.
Gas demand in India runs at around 179 million standard cubic metres a day, but domestic availability is only around 95 mmscmd.
Production is expected to rise to more than 190 mmscmd by 2009 after new gas fields come on stream.
Goldman Sachs estimates the share of natural gas in India's coal-dominated energy basket will double to 18 percent by 2015 and stabilise at 20 percent by 2025.
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