Petronet to get first 2010 spot LNG cargo in Sept

Last Updated: Fri, Aug 20, 2010 12:10 hrs

Petronet LNG<PLNG.BO> will get its first spot cargo of liquefied natural gas (LNG) in 2010 from RasGas next month, slightly later than expected, as it moves to plug a shortfall due to the shutdown of some gas fields.

"We are talking to RasGas for a spot cargo and the deal is expected to be finalised by the end of this month," A. K. Balyan, chief executive of Petronet, told reporters on the sidelines of an industry function on Friday.

Asked if he was referring to the same cargo which he had previously said would arrive on Friday, Balyan said "Yes," adding delivery was now expected next month.

A trade source had earlier told Reuters that Petronet had bought a spot LNG cargo from Qatar's RasGas for delivery in September.

Petronet halted spot LNG imports last December as RasGas stepped up supplies by 50 percent to 7.5 million tonnes a year under a long-term deal and a boost in local supplies soaked up pipeline capacity in Asia's third-largest economy.

SALES DECLINING

LNG sales in India have been declining since Reliance Industries began pumping gas from its east coast fields in April 2009. In July, LNG sales fell 8.4 percent from a year earlier to 684,500 tonnes, according to government data obtained by Reuters.

Petronet had no plans to tap the spot market until December, former chief executive P. Dasgupta said in June. But closure of the Panna-Mukta oil and gas fields off the country's west coast since July 20 has prompted the Indian firm to look earlier for spot deliveries.

Balyan said there was scope to buy more LNG cargoes from the spot market.

"Currently pipeline capacity is there for spot cargoes due to shutdown of Panna-Mukta fields ... We bought this cargo because there was a demand from IOC, BPCL and GAIL. They want more LNG," he said.

Petronet, which operates a 10 million tonnes a year LNG regasification plant at Dahej in western Gujarat state, sells LNG to state run firms Indian Oil Corp. (IOC), Bharat Petroleum Corp (BPCL) and GAIL (India) Ltd, which then supply industrial users.

Besides RasGas, Petronet has a deal to buy 1.5 million tonnes of LNG annually for 20 years starting in 2014 from Australia's Gorgon project, which will be regassified at its upcoming 2.5 million tonnes a year Kochi terminal in south India.

Balyan said on Friday the Kochi terminal is expected to be commissioned in April or May 2012.

Petronet is in talks with Australia and Qatar for sourcing additional LNG through long-term contracts to hedge against fluctuations in prices and fully utilise the two terminals, Balyan added.

(Editing by Sue Thomas)

(For more business news visit Reuters India)



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