Petronet LNG Limited: Ensuring India's Energy Security

Download pdf version

Capt. Hemant Kumar Varma
Chief Manager (Port Operations) & PFSO
Petronet LNG Limited

Petronet LNG is at the forefront of India's all-out national drive to ensure the country's energy security in the years to come. Formed as a Joint Venture by the Government of India to import LNG and set up LNG terminals in the country, it involves India's leading oil and natural gas industry players. The promoters hold 12.5 % each in the equity structure.

Incorporated on April 2, 1998, the company has the authorized capital USD 260 million and Paid up capital USD 160 million.

Petronet LNG Limited, one of the fastest growing world-class companies in the Indian energy sector, has set up the country's first LNG receiving and regasification terminal at Dahej, Gujarat, and received 1st Cargo at Dahej on January 2004 commencing its commercial operations in April 2004.

Terminal expanded its capacity from 5 MMTPA to 10 MMTPA after completion of Phase II of the Project from June 2009, and is in the process of building another terminal at Kochi, Kerala.

Dahej terminal has a nominal capacity of 10 MMTPA [equivalent to 40 MMSCMD of natural gas]; while Kochi terminal will have a capacity of 5 MMTPA [equivalent to 20 MMSCMD of natural gas] and is scheduled for commissioning by end of 3rd Qtr. 2012.

Truck loading facility at Dahej terminal was commissioned in August 09, 2007 as a Pilot Project. Presently, about 4-5 trucks are loaded on daily basis and the facility can handle 2500 loadings per year. Fast developing market with several new consumers (up to 800 KMS) is being lined up for off-take of LNG for industrial and city gas use.

A Solid Cargo Port through a Joint Venture company namely Adani Petronet (Dahej) Port Private Ltd., has already commenced its Phase 1 operations from August 2010 at Dahej Port. Solid Cargo Port Terminal would have facilities to import/export bulk products like coal, steel and fertilizer.

LNG Sourcing

Petronet LNG Ltd. sources 7.5 MMTPA through Long Term Contract with RasGas, Qatar with back to back sales arrangement with GAIL, IOCL & BPCL. 1.44 MMTPA LNG is tied up from Exxon Mobil's Gorgon Venture in Australia for Kochi terminal. Additional LNG is being sourced by PLL through Spot /Short Term Contracts & sold to Off-takers/ Bulk Buyers.

Three LNG tankers, SS Disha, SS Raahi & Aseem have been time chartered by the company from a consortium called India LNG Transport Company Ltd. led by Mitsui OSK Lines for bringing LNG to Dahej. Shipping Corporation of India is currently operating and maintaining LNG tankers SS Disha and SS Raahi. The third ship MT Aseem has commenced supply of additional volume of LNG Cargo from RasGas, Qatar to Dahej LNG Terminal since first week of January, 2010.

LNG Off Takers

Petronet LNG Limited has entered into marketing alliance for the entire throughput quantity of 10MMTPA of Regasified-LNG through the Gas Sale & Purchase Agreements with the three Promoters - cum - Off takers i.e. GAIL (India) Ltd., Indian Oil Corporation Limited and Bharat Petroleum Corporation Limited (Public Sector Undertakings of the Government of India) in the ratio of 60:30:10 respectively.

Future Plans

The future initiatives of Petronet LNG includes further capacity expansion at Dahej up to 15 MMTPA, Second LNG jetty at Dahej that is presently under construction, Third LNG Terminal in Eastern Coast and Proposed power plant of 3 x 356 MW-ISO (total 1068 MW CCGT) with improved performance having an expected output of 1200 MW at Dahej . The company has also entered into direct RLNG marketing by signing Heads of Agreement (HOA) with bulk end consumers in Power producers, Industrial consumers, Fertilizers Producers etc. LNG/LCNG i.e. LNG through Trucks and supplies is provided by the company at LNG hubs as well as customer's premises in regions not serviced by pipelines.

Creating Energy Independence :

From the time of receiving the first cargo of LNG in January 2004, amidst strong apprehensions in the industry whether LNG could be sold in the country till today, Petronet LNG Limited supplies about 10 MMTPA of Regasified LNG to different Offtakers in the country. PLL has been able to carve-out a professional, credible image in the world of LNG market.

"Energy Independence" which has to be the first and highest priority for a developing economy like India, Petronet LNG Limited endeavors in taking this important role in meeting the increasing energy requirements of India & promoting the use of environmental friendly fuel to reduce emissions.