Posted -
Reporting by Nidhi Verma; editing by Jane Baird
NEW DELHI, Aug 13 (Reuters) - Indian Oil Corp will
start work on its first liquefied natural gas (LNG) plant at
Ennore in the east coast by the end of this year, its chairman
said on Tuesday, as it sees a gradual rise in local acceptance
of the costly imported fuel.
State refiners IOC, Hindustan Petroleum Corp and
Bharat Petroleum Corp, also major gas users, have all
unveiled plans to build LNG plants as local gas output falls,
which will increase the share of he costly imported fuel in
India's energy mix.
India's gas demand will rise to 466 million cubic meters a
day (mcmd) in 2016/17 from 286 mcmd in 2012/2013, according to
the government estimates, while its supply will be only half
that.
IOC, India's biggest retailer of fuel for transport and
industrial uses accounting for half of demand, aims to supply
clients who want to replace fuel oil and naphtha with gas, R. S.
Butola told a news conference.
"When it comes to a fully-grown (mature) market, who has got
better spread than Indian Oil? ... In the long term there should
be much wider acceptance of market prices for gas," Butola said.
The government in June took the unpopular step of raising
domestic gas prices from April and linking them to global LNG
benchmarks after keeping them frozen for three years.
IOC is in process of tying up customers for the Ennore LNG
terminal, which is likely to be ready in 2016/17, said its head
of business development, A. M. K. Sinha. IOC is in talks with
global firms including Russia's Gazprom to source gas
for the Ennore plant, he added.
"We are in discussion with potential customers like Madras
Fertiliser, Chennai Petroleum and some auto industries in the
region. Day by day we are increasing our list," Sinha said.
IOC has also signed an initial deal with Dhamra Port Ltd to
build a 5 million tonne/year LNG plant in eastern Orissa state.
It could annually use 2.5 million tonnes of LNG from the
Orissa terminal for its planned 300,000 barrels per day Paradip
refinery and its existing Haldia and Barauni refineries, Sinha
said.
IOC along with subsidiary Chennai Petroleum Corp
controls about 31 percent of the national refining capacity of
4.3 million bpd.
HPCL's head of finance, K V Rao, also said his firm would
replace naphtha and fuel oil at its two refineries with gas from
its planned terminal in western Gujarat state.
Post to be found at:
http://in.reuters.com/article/2013/08/13/india-ioc-lng-idINL4N0GE2ZH20130813
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