India steps up plans to import Middle East LNG

After almost a decade of indecision, India is finally set to tap the Persian Gulf for importing vast quantities of liquefied natural gas (LNG) that would serve as feedstock for a large number of industrial sites and forthcoming power-generation stations.

At least two proposals to bring LNG into the country from the Middle East are advancing. One of them is from the Gas Authority of India Ltd. (GAIL), acting on behalf of Petronet, a consortium of four public-sector enterprises, including GAIL. The other is Enron International.

GAIL, Enron projects

GAIL has received offers for commercial terms of gas supply from seven bidders short-listed earlier after technical scrutiny. The deadline for receiving the offers was Mar. 25.

The selected suppliers would deliver 5 million metric tons/year of LNG, half of which would be offloaded at Cochin in Kerala, the other half at the private port of Dahej in Gujarat.

The total quantity would be sufficient to fuel power stations with an aggregate capacity of 5,000 MW.

GAIL is simultaneously looking at two more LNG import projects of almost identical capacity at Mangalore, in Karnataka, and at Ennore, near Chennai in Tamil Nadu.

A consortium led by Japan's Mitsubishi Heavy Industries Ltd. has done a technical-commercial feasibility study for the Cochin terminal and three other potential import sites.

Enron is reportedly holding talks with potential customers for LNG supplies amounting to 3 million tons/year. This quantity would be additional to the 2 million tons/year to be used for captive consumption at the U.S. multinational's giant 2,184-MW power project in Dabhol, near Ratnagiri.

The deal could give a big thrust to Enron's proposed 5 million ton/year liquefaction plant in Qatar (OGJ, Mar. 16, 1998, Newsletter).

LNG imports

The focus in India has shifted from gas imports through pipelines from Oman and Iran to LNG imports in tankers.

Officially, both the pipeline projects are still planned, but several practical difficulties have hurt their prospects of being completed.

A spate of Indian LNG import projects has been announced recently (OGJ, Dec. 8, 1997, p. 23; Sept. 8, 1997, p. 37).

In total, about 50 million tons/year of LNG would be coming into India if all the projects proposed by prospective investors and approved by Indian authorities move forward.

Other players proposing LNG import schemes in the country include Royal Dutch/Shell, Total, and BG plc, although, in terms of sheer size, the domestic group Reliance Industries Ltd. is ahead of them all. The latter is planning two 5 million ton/year terminals, at Hazira and Jamnagar in Gujarat.