After years of negotiation, Petronet LNG—a privately-registered company promoted by state-run oil firms to import gas in ships—on Monday signed a multi-billion dollar agreement with ExxonMobil to source 1.5 million tonnes (mt) per year of gas for 20 years from a field the US major’s Australian arm is developing in partnership with Chevron.
The companies did not give the total value of the deal but sources said gas from Australia would be mixed with domestic supplies to keep prices affordable through ‘pool-pricing’. It will come as a relief to fuel-starved southern power plants, including NTPC’s Kayamkulam unit in Kerala.
ExxonMobil can sell another 1.3mt of LNG but Petronet has not yet committed to additional volumes since it has yet to tie up consumers. As of now, Petronet will import 1.5mt from the Gorgon LNG (liquefied natural gas) project being developed in western Australia. ExxonMobil will supply gas from its share of the output from the field. Gas will be shipped to Petronet’s upcoming LNG terminal at Kochi where it will be regassified for distribution in the southern region. Supplies are expected to start in 2014.
“Provision of LNG to our new terminal at Kochi, supporting more than $2 billion of related energy infrastructure investment in India, will give consumers in Kerala access to clean-burning fuel. This will enhance the economic development of the region and help maintain the pristine ecology of the state,’’ a Petronet release quoted CEO Prosad Dasgupta as saying. Chevron, which is the operator with 50% stake, won environment approval for the project on Monday from the Western Australia government, leaving one last government hurdle to be cleared before it makes a final investment decision. The federal government has now to finalise its own environmental approval process.
The project was originally expected to cost $9 billion, but the state government has estimated the scaled-up project could end up costing five times that amount. The Greater Gorgon fields are estimated to have reserves of about 40 trillion cubic feet of gas. Petronet is operating India’s biggest LNG import and regassification terminal at Dahej with a capacity of 10mt per annum. It has a 25-year contract with Qatar’s RasGas to source gas from the Ras Laffan project.
courtesy:Timesofindia
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