Public sector oil behemoth Indian Oil Corporation (IOCL) is looking at buying stakes in several LNG terminals across the country, such as Mundra and Dahej in Gujarat and Dighi in Maharashtra. IOCL is also in talks with three foreign companies for a joint partnership for the proposed R4,512-crore LNG terminal project at Ennore, near Chennai.
AK Marchanda, executive director ? in-charge (gas), business development, IOCL, told FE that the company aims to cater to clients who want to replace fuel and naphtha with gas. He was in Chennai to sign an MoU with the Kamarajar Port to set up the R4,512-crore LNG terminal.
Marchanda said the gas terminal projects which the company would be looking at include the Rs 5,200-crore LNG project in Mundra being set up by Gujarat State Petroleum Corporation (GSPC). IOCL is looking at buying around 25% in the project .
In Dahej, Petronet LNG operates an LNG terminal with a capacity of 10 million tonne per annum. Work is on to increase it to 15 million tonne at an estimated cost of about R2,950 crore by end-2016. The other major project is coming up at Dighi port, Maharashtra.
The 8-million-tonne LNG terminal is being set up by Mumbai-based Hiranandani Group. IOCL has also signed an initial deal with Dhamra Port to build a 5-million-tonne-per-year LNG plant in eastern Orissa with an investment of close to R5,000 crore.
Marchanda said the LNG terminal project at Ennore has got the environment ministry’s clearance. The tender process will commence soon.
The project will go onstream in three-and-a-half years’ time. It will be executed through a joint venture. “We are talking to three large foreign companies, who can source LNG for us. If they are interested we can give up to 10% stake in the JV,” said Marchanda. Tamil Nadu Industrial Development Corporation (TIDCO) will have a 5% stake in the new JV.
In Ennore, IOCL and the state government agency together will have a 50% stake while the balance will be held by FIIs and the foreign partner. The project will mainly cater to industries and households in TN.
The initial capacity of the Ennore terminal will be 5 mtpa. The company is planning to expand it to 15 mtpa over a period of time.
The Ennore LNG project will also act as a catalyst for piped natural gas supply to households in Tamil Nadu. IOCL will take steps to embark on laying of pipeline soon. The pipeline is crucial for evacuation of gas, he said.
“We have approached the Petroleum and Natural Gas Regulatory Board for a bid to set up pipelines as the Ennore terminal should not face the same difficulty that Kochi is facing now,?Marchanda said. Though Kochi’s LNG terminal is up and running, pipelines were not available for evacuation of gas.