Oman finalises gas supply price for LNG

Monday, 29 September 2003, 07:00 Hrs
Printer Print Email Email
NEW DELHI: Qatar-based Ras Laffan Liquefied Natural Gas Company Ltd (RasGas) Friday finalised a 25-year gas supply agreement with Petronet LNG, a consortium of state-owned energy majors.

With this, domestic consumers, mainly power and fertiliser units, would be able to get liquefied natural gas (LNG) at $3.6 per million BTU (British Thermal Unit), which compares favourably with what other private gas producers are promising to supply in future.

Complementing India and Qatar at the signing ceremony, RasGas vice chairman Ibrahim B. Ibrahim said the Petronet LNG project would be the first of its kind in a developing country.

The Petronet LNG terminal at Dahej in Gujarat is to be commissioned in December, with supplies from Qatar to begin early 2004.

"Gas shortages in the country will be considerably reduction once the supplies begin," said Petroleum Minister Ram Naik.

Domestic gas production is currently able to meet just half of the 115 million standard cubic metres per day (MMSCMD) demand. To bridge the gap between demand and supply, India has been stepping up exploration with encouraging results while simultaneously looking for imports.

India had to renegotiate the gas supply mechanism for the 5 million tonne capacity Dahej terminal as Royal Dutch/Shell Group's subsidiary in the country is gearing to complete its 2.5 million tonne terminal at Hazira in Gujarat by end of 2004.

With its multi-source option, Shell is slated to offer competition to Petronet LNG (PLL), a consortium of state-owned Indian Oil Corporation, Oil and Natural Gas Corporation (ONGC), GAIL (India) Ltd and Bharat Petroleum Corporation Ltd (BPCL).

As per the agreement RasGas will supply 2.5 million tonnes of LNG in the first year and double it from 2005.

The price of gas has been fixed at $20 a barrel for 25 years. After including shipment, handling, regassification, transportation and marketing cost, PLL hopes to supply gas to consumers at around $3.6 per million BTU, which compares well with the price being offered by India's energy major Oil and Natural Gas Corporation (ONGC) after recent revision.

"The Dahej terminal (being built at a cost of $400 million) is 95 percent complete and we will commission it as per schedule in December," Suresh Mathur, chairman and managing director of PLL said.
Source: IANS
SPOTLIGHT
Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..