Oil India Ltd (OIL) is the latest to join the fray for getting into the liquefied natural gas (LNG) business. The company is looking at the end of this fiscal to enter the business.
OIL has been holding consultations with companies such as Kakinada Seaports for exploring opportunities to set up an LNG terminal.
“We are focussed on diversifying into the LNG business. OIL shall look at overseas market to source LNG as well as to build a terminal in India with suitable partner,” said Mr T.K. Ananth Kumar, Director (Finance), OIL.
Inadequate domestic natural gas production and growing demand has been pushing the companies into the imports market. The recent one to join the bandwagon is Reliance Power, which has tied up with Shell and Kakinada Seaports.
OIL has not yet firmed up any investment plans. “It would depend on the project,” he said.
The availability of imported oil and gas has been fluctuating from time to time depending upon the demand, price, and tie-ups with the suppliers. The domestic gas production is about 115 mmscmd (which is declining), and the supply is about 165 mmscmd (from all sources). The gap is met through imports.
The country, at present, has two LNG terminals. According to estimates, the country's re-gasification capacity will reach around 50 million tonnes annually by 2016-17. Today, the re-gasification capacity is 13.6 million tonnes annually — 10 million tonnes at Petronet LNG's Dahej terminal and 3.6 million tonnes at Shell's Hazira terminal.
End of this calendar year (December) could see a third facility of 5 million tonnes constructed by Ratnagiri Gas and Power Pvt. Ltd to be commissioned. Attempts to commission the terminal earlier this year had failed.
Meanwhile, Petronet LNG is looking at taking the Dahej terminal capacity to 12.5 million tonnes by 2013 and 15 million tonnes by 2015-16, Shell is also increasing the capacity to 5 million tonnes by 2013-14.
Another 5-million tonne capacity is being added at Kochi by Petronet LNG which is expected to double. GSPC-Adani plan to add 5 million tonnes terminal at Mundra. Indian Oil Corporation proposes to set up a 5 million tonne terminal at Ennore Port.