India to ink deal with Australian company for LNG import

NEW DELHI: India is close to signing an agreement with Australia’s Gorgon’s Projects to import 2.5mtpa of LNG at Petronet LNG’s Kochi terminal. The deal is expected to be signed by mid-September and supply will begin in ’09.

“We are close to signing a deal with Australia to import 2.5mtpa of LNG from the North West Shelf area. The deal may be finalised by mid-September and gas will flow in from ’09,” MS Srinivasan, secretary in the ministry of petroleum & natural gas, said at the Australian oil and gas exploration opportunities promotion programme organised by the Australian High Commission.

“The rate at which gas will be supplied will be extremely affordable,” he said. The Australian company will arrange for LNG supply through a consortium, which will include stakeholders like Chevron, Exxon Mobil and Shell.

The supply contract will be for 25 years and details on pricing and mode of payment will be decided at the final round of discussions, by September. Talks on the deal have been going on since late last year.

The Kochi terminal’s initial capacity will be of 2.5mtpa. It may be enhanced to 5mtpa depending on the demand. Petronet has planned to call for bids to order a ship for transporting the gas.

A decision on this may be taken after the deal is finalised. Petronet LNG was formed by the government to import LNG and set up LNG terminals in India. It is a JV firm promoted by Gail India, ONGC, IOC and Bharat Petroleum.