Petronet eyes Bangla, Lanka forays to tap gas market

NEW DELHI: India could be slowly emerging as a bridge between global LNG (liquid gas) suppliers and the SAARC (South Asian Association for Regional Co-operation) as its government-backed utilities plan to expand in Bangladesh and Sri Lanka to increase the market for large volumes tied up under long-term contracts.
India’s Petronet LNG, a company promoted by staterun oil companies, is in talks with the governments of Bangladesh and Sri Lanka to build infrastructure for importing gas in ships in their territory as the two countries look at ramping up gas-fired generation capacity to meet rising demand.Petronet is India’s largest LNG player and runs two LNG terminals, with long-term contract for almost 10 million tonnes of LNG suppliers in Qatar and Australia.
Staterun GAIL, which is one of the Petronet’s promoters, has contracts with suppliers in the US and Russia for 8.3 million tonnes. Both also buy additional volumes from the spot market, while GAIL has a trading wing in Singapore.
Together, the Indian combine offers end-to-end solution, with economy of scale to neighbouring markets. The Bangladesh terminal is being proposed at Kutbdia near Cox’s Bazaar with 5 million tonne per annum capacity. A floating facility built on modular format for future expansion with one million tonnes capacity has been proposed for Sri Lanka.
The projects could entail total investments of Rs 6,000 crore. Company managing director Prabhat Singh said the Kutubdia proposal emerged during oil minister Dharmendra Pradhan’s discussions with Bangladesh government in April. “The idea is to take along GAIL for sourcing gas and perhaps IndianOil or others can join in for marketing ventures with Bangladesh companies,” Singh said.