Sources informed that talks are underway with Gail as well as Indian Oil Corporation (IOC), but nothing has been finalised yet. Sources added that Metgas has already signed a memorandum of understanding with IOC to draw synergies from the latter's LNG pipeline to come up on the east coast.

Enron has already invested about Rs 2,250 crore for setting up the 5 million tonne (mt) LNG import facilities, said sources. Enron wants to increase its LNG imports from 2 mt to 5 mt and become the commercial supplier for LNG, sources said. Two mt of LNG will be sourced from Malaysia. Enron plans to sell the remaining 3 mt of LNG to local power producers and industrial houses. Enron already has a Gas Sale Agreement (GSA) in place with Rashtriya Chemicals and Fertilisers Ltd (RCF) for supply of 1 mt of natural gas for its Thal unit. The agreement is for a period of 20 years and the supply to RCF is expected to commence in the next six months.

Another deal has been struck for the supply of 0.2 mt of LNG per annum for about 20 years to Ispat Energy. Supply to Ispat is likely to commence in 2002. The LNG would be transported from Dabhol to Ispat's captive power plant in Dolvi through a 354 km pipeline. Enron has set up a separate company, Metropolis Gas, to build and operate the pipeline.

Meanwhile, the company is exploring other states for supply of LNG. Sources added that Gujarat will be taken up in the second phase which will be followed by Karnataka. Sources added that there was no immediate demand for LNG in Karnataka but the company is keeping its options open. Since the main project will be at Dabhol, the company would find it easy to move north into Gujarat and on the south in Karnataka, added sources. The demand for LNG in Gujarat is good and the local requirements are not being met, said sources, adding that Metgas has a good opportunity. The company has stressed that it currently wants to concentrate on the projects in Maharashtra.