An Australian LNG marketing venture has lined up a possible equity stake in an Indian petrochemicals and power complex to promote sales of LNG to the complex.
Australia LNG (ALNG)-the vehicle established early in 1999 to market Australian gas to potential Asian buyers outside Japan-was expected last month to sign a memorandum of intent with the backers of the proposed $5 billion complex at Gopalpur, Orissa, on India's eastern coast, to supply it with 5 million tonnes/year of LNG.
Plans call for building an LNG receiving terminal at an estimated cost of 14.82 billion rupees to handle 5 million tonnes/year of LNG, which will be regasified to use as fuel for a 2,000-2,500 Mw power plant estimated to cost 42.35 billion rupees.
The heart of the complex will be a 1.2 million tonne/year naphtha cracker, expected to cost 50.82 billion rupees; a 1.2 million tonne/year urea-ammonia complex estimated to cost 33.88 billion rupees; and certain downstream olefins units.
Agreements, funding
The ALNG venture-formed last year by BHP Petroleum Pty. Ltd., BP Amoco PLC, Chevron Corp., Woodside Petroleum Ltd., and the MiMi combine of Mitsui & Co. and Mitsubishi Corp. at the end of 1999-signed a heads of agreement with UAE-based Al Manhal International Group (AMIG) to jointly study a proposed LNG import project at Gopalpur (OGJ, Jan. 3, 2000, Newsletter). The exclusive agreement is to extend for 6 months to investigate the potential for long-term LNG supply sourced from natural gas fields off Australia.
AMIG is also soliciting interest for strategic partners to take additional equity stakes in the project, including the state agency Industrial Promotion and Investment Corporation of Orissa Ltd., in an effort to start up the project by the end of 2003 or in early 2004.
The state-owned Petronet LNG (a combine of several Indian state firms lining up Indian LNG supplies) and state gas giant Gas Authority of India Ltd. are also slated to pick up equity in the project, which is expected to see foreign direct investment of nearly $4 billion.
"The investments will be routed through Mauritius," said Farid Arifuddin, managing director of the New Delhi-based Vavasi Oil & Gas Pty. Ltd., which has been appointed to coordinate and execute the project. "The project will have a debt-equity ratio of 70:30, while in the case of [a comparable] pipeline project, the ratio is likely to be 50:50."
Sumitomo Bank will be financial advisor on the project.