Unocal Inks MoU With Major Firms For Natural Gas Supply

Mumbai, July 23: | Updated: Jul 25 2002, 05:30am hrs
California-based natural gas and oil exploration major, Unocal Corporation has signed a memorandum of understanding (MoU) with various companies in the northern belt of India for supplying 3.5 billion cubic feet of natural gas annually from Bangladesh. Majority of these are fertiliser companies.

Some of the companies with whom Unocal has already signed MoU are Hindustan Fertiliser Corporation Ltd, Chambal Fertilizers & Chemicals Ltd, Shriram Fertilisers & Chemicals, Maruti Udyog Ltd, Punjab State Industrial Development Corporation Ltd, UP State Industrial Development Corporation Ltd, Oswal Chemicals & Fertilisers Ltd, Indo Gulf Corporation Ltd, Duncan Industries Ltd, Tata Chemicals Ltd, Power India Ltd, Damodar Valley Corporation, WB Power Development Corporation Ltd and Calcutta Electric Supply Corporation Ltd.

Unocal Corporation is also in talks with Indian companies for supplying natural gas, including Tata Iron and Steel Co Ltd, Steel Authority of India in Chhattisgarh, Jharkhand and West Bengal, and Haryana and Madhya Pradesh State Industrial Development Corporation and Government of Bihar. Initially, about 500 million cubic feet of gas would be supplied daily to India through the natural gas pipeline. The pipeline is 1,363 km, of which 343 km would be in Bangladesh. Unocal Corporation has so far invested $340 million in the project. The gas would be supplied from the Bibiyana oil and gas field in Bangladesh. Sources said that north-west India in and around the Delhi region is the biggest market and has good potential.

The Bangladesh government is yet to give a go-ahead to resuming gas supply to India. The supply is expected to start in October, as the Bangladesh government is in the process of clearing the project.

On the Indian side, natural gas would be supplied from the Bangladesh border to the concerned companies by a consortium of three public sector companies — Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) and Gas Authority of India Ltd (GAIL).

The three companies are also tapping fertiliser companies which are the biggest consumers, requiring about 35 per cent of the natural gas available in India.

Sources added that power plants would also be tapped since they consume about 40 per cent of the total natural gas stock in India, at present. Experts said that natural gas can be used for domestic as well as transport purposes. The government is yet to take a call on allowing natural gas for transportation.