Date:26/12/2005 URL: http://www.thehindubusinessline.com/2005/12/26/stories/2005122602200500.htm

Back Kochi terminal: Petronet to finalise deal with Australian co by Jan

G.K. Nair

Kochi , Dec. 25

THE board of directors of Petronet LNG Ltd (PLL), which met at Kumarakom in Kerala on Saturday, has decided to finalise a deal next month with an Australian company, Gorgan Projects, for supply of LNG to its proposed 2.5-million-tonne per annum terminal here to be commissioned by 2009.

The Australian company would arrange for the supply of LNG through a consortium of which the stakeholders are Chevron, Exxon Mobil and Shell.

The discussions with Gorgan projects are in an advanced stage, Mr Sham Sundar, Director (Technical), PLL, told Business Line. He said the price and the total quantity of LNG to be bought would be finalised in the final round of discussions in January.

Though the terminal would have an initial capacity of 2.5 mtpa it would be enhanced later to 5 mtpa depending on the demand for the gas. Taking this potential into consideration, the storage tank to be built here will have a capacity to 5 mtpa, he said.

He said for transportation of LNG from Australia "we will order one more ship from the shipping company, which offers us the better price". However, a decision on this will be taken after the deal with the LNG suppliers is finalised.

The lowest bidder for carrying LNG from Ras Laffan Gas, Qatar to Dahej terminal is the consortium of SCI, along with its partners Mitsui OSK Lines, NYK Lines and K Line, he said. The other is the consortium of Great Eastern Shipping Company with Teekay Association. These two consortia had submitted fresh bids as asked for by PLL, following the government's decision to allow chartering of foreign flag vessels for import of LNG.

According to Mr Sham Sundar, EPC contract for the terminal here would be awarded before March 2006. Issues relating to the formal handing over of 35 hectares of land at Puthuvype, where the terminal is to be set up, have been sorted out, he said.

The PLL was formed by the Government of India to import LNG and set up LNG Terminals in the country. It is a joint venture company promoted by GAIL (India) Ltd, Oil and Natural Gas Corporation Ltd, Indian Oil Corporation Ltd and Bharat Petroleum Corporation Ltd , with an authorised capital of Rs 1,200 crore.