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BPCL Plans JV for LNG Terminal

Company in talks with ONGC for 5 mtpa facility

  • Bharat Petroleum Corporation (BPCL) is exploring a possibility to set up a liquefied natural gas (LNG) terminal in India with a joint venture partner to meet the growing demand for imported natural gas as domestic gas production declines. The company is in talks with few oil and gas companies including ONGC, and is looking at setting up a 5 million tonnes per annum (mtpa) terminal to cater to the rising demand for gas from the power, fertiliser and city gas distribution companies.

  • A senior company official told Financial Chronicle that the discussion is at a nascent stage and the company is looking at all possibilities on the east as well as the West coast. In the long run, the exploration and production arm of BPCL also plans to bring the gas from the latest discovery in Mozambique to India, where the terminals can be of great help to the company, besides helping the country to meet the growing demand efficiently.

  • The output from RIL held KG D6 basin has fallen to less than 40 mmscmd from its peak of 60 mmscmd in 2010. Since then, all the major power and fertiliser companies have been paying an average of $14 per mmbtu for the imported LNG compared with RIL’s $4.2 per mmbtu.

  • “We would look at a terminal of 5 mtpa at a cost of around Rs 4,500 crore for the re-gasification plant. The formalisation of the plan and locations and others will be done in six months’ time. One location that is under consideration is Mangalore, but we have not yet finalised that,” the BPCL official said.

  • BPCL is importing crude oil for its refineries. Its move to set up a LNG terminal is also necessitated by its gas finds in Mozambique oil block billed as three times bigger than KG-D6 basin with in-place reserves of 50 plus mtpa. The company also plans to bring some portion of the gas post-production to India.

  • Other than BPCL some other oil and gas majors are also initiating the process to set up LNG terminals to meet the growing demand within the country. Indian Oil Corporation is in talks with Ennore Port to set up a terminal at an investment of Rs 4,300 crore for importing LNG. GAIL India is starting its LNG terminal at Dabhol by the end of this month or early next month, Financial Chronicle reported on Tuesday, while Petronet LNG has zeroed in on Gangavaram Port in Andhra Pradesh for their third LNG terminal with a 5 mtpa capacity.

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