Gujarat to set up two LNG terminals

Posted: 2005-08-20 01:09:40+05:30 IST
Updated: Aug 20, 2005 at 0109 hrs IST

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Ahmedabad, Aug 19: • Options of import of natural gas for the terminals being explored
• State in talks with private investors/consortium players for investments
• Initial terminal capacity will be 2.5 mmscmd However, according to the report, LNG cannot be imported in India at these price levels. The investment for the entire chain could be $5-10 billion, depending on the capacity.

Based on 10% customs duty, 3% of total investment cost dedicated to operations and maintenance, and expected rate of interest of 16%, the expected price of LNG would be between $3 and $3.5 per mmbtu, prior to regassification.

Under the aegis of GIDB, the detailed report on “development potential of Kutch”, incorporating the details of the proposed LNG terminal project in the region, has been submitted to Gujarat government.

Speaking to FE, Jayant Parimal, chief executive officer of GIDB, said, “Government is actively pursuing discussions with private investors/consortium players for investment in this project. The private sector petroleum majors have the financial stability and capability to support the project. Gujarat government, on its own, is not capable to set up LNG terminal in the region. In view of such huge investment and loner gestation period, it is necessary to form a buyer consortium of assured markets and a long term agreement with them—typically for 20 years or more with ‘take or pay’ clause.”...