Even as over 200 new power plants and scores of urea units queue up before the government for natural gas allocation, gas transportation major GAIL India has said it would significantly step up its gas imports when it completes three major pipeline projects and the facilities to re-gassify imported liquid natural gas.
?Now we import about 7.5 million metric tonne a year of liquified natural gas. Once the new pipelines are in place, we would import about 20-25% more to meet the domestic demand,?GAIL CMD BC Tripathi told FE. The three projects that would be commissioned this year and the next are Dabhol-Bangalore, Bawana-Nangal and Kochi-Bangalore and Mangalore. GAIL imports LNG through Petronet LNG, co-promoted by BPCL, IOC and ONGC.
Now GAIL has facilities to import and re-gassify LNG in Dahej, Dabhol and Hazira and the work on an LNG regassification terminal is going on in Kochi, Tripathi said. The company, which has a gas transportation capacity of 150 million standard cubic metre a day through a 7,800-km pipeline network, wants to add another 3,000-4,000 km of pipeline length over the next couple of years that would almost double its transportation capacity.
Since domestic production of gas is far short of the rising demand, GAIL has to look for foreign sources of gas?spot as well as long term contracts. Since RIL?s production from its D-6 field in the Krishna Godavari basin would continue at only 60 million standard cubic metre a day (mmscmd) till 2012-13 before it goes up to 80 mmscmd, the government had to make arrangements last week to facilitate gas from other producers like ONGC to consumers, who were earlier allocated KG D-6 gas but were not getting supplies.
Experts said it is possible now to strike contracts to fetch gas at a competitive price of around $6-7 per unit at any facility in India, which would match the price of KG D-6 gas when transportation charges are included. Potential LNG suppliers to India include exporting countries such as Indonesia, Australia, Qatar, Oman, UAE and Algeria.
The need to source gas from overseas market is becoming vital as the government is flooded with request for over 550 mmscmd of gas from power plants alone. This includes the requirement of the proposed power plants of Anil Ambani-led ADA Group. One mmscmd of gas is required to produce 22 mw power. Some companies in the fertiliser sector have told the fertiliser department that they are willing to invest in fresh urea capacity if the government can guarantee long-term gas availability at stable prices.