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Gas Buyers Queue Up for LNG

Posted on Jun 6th, 2011

With indigenous gas production in the country seeing a sharp 10.6 per cent yoy decline in March 2011 in wake of the steep production shortfall at Reliance Industries (RIL) Krishna Godavri D6 fields, oil marketing companies, city gas distributors and gas aggregators are queuing up for imported liquefied natural gas (LNG).

?Our promoters Bharat Petroleum Corporation and the Indian Oil Company have indicated that they will require additional supply of LNG, for their own usage at their refineries and for their various customers in the fertilizer and others sectors, so we are planning to source two cargoes of LNG in the near-term and are currently negotiating with our regular suppliers and others,? Ashok Balyan, MD & CEO, Petronet LNG told ET.

In the same vein, Nitin Shukla, CMD, Hazira LNG told ET, ?We are aware that various customers are approaching gas aggregators (like GAIL) for additional supply of LNG who in turn are approaching us for their supply requirements and we will be looking to source more LNG cargoes in the near future.? In fact according to sources RIL itself has signed a two-year contract with Hazira LNG to import spot LNG in April 2011.

RIL needs gas for its Jamanagar-based refining complex and petrochemical plant, Shukla refused to comment on the issue, he said, ?We have gained a lot of new customers this year and I will not like to discuss any of them.? Earlier, VC Chittoda, MD, Mahanagar Gas had told ET, ?I do foresee that the shortage of domestically produced gas will increase so we are talking LNG importers like Hazira and others about signing a long-term contract for LNG supply.? He also said, ?Right now about 1 per cent of our total gas requirement is met by LNG but I see this increasing to 15-20 per cent in the next 2-3 years.?

A top industry official told ET, ?to overcome the production shortfall at KG D 6 GAIL, Petronet Lng, Hazira LNG, RIL and GSPC will be importing around 36 additional cargoes of imported LNG this fiscal. Out of these GAIL will be importing 12 cargoes, that is one cargo every month starting April 2011.? FACTS Global Energy, which monitors international trends in oil and gas, estimates that India?s LNG imports in calendar 2011 would rise 40% to 12.5 million tonnes.

http://www.lngworldnews.com/india-gas-buyers-queue-up-for-lng/