BPCL eyes Maharashtra, Karnataka for LNG unit

Rs 4,500 cr to be invested for proposed terminal; will have a capacity of 5-6 mt.

State-run Bharat Petroleum Corporation Limited (BPCL) is looking at Maharashtra and Karnataka to set up a land-based liquefied natural gas (LNG) terminal.

BPCL, which is working on a pre-feasibility report, was looking at both the east and west coasts to set up the terminal for around $1 billion. The terminal will have a capacity of 5-6 million tonnes, said a company executive. Gujarat has two terminals and another one is proposed to come up at Mundra.

"We are actively looking at the option of Karnataka and Maharashtra,” said a company executive.

The company could either look for a partner or go on their own to set up a terminal. “The prevalent model of setting up a terminal is on a partnership. We are evaluating our options. We may go in for a partner and invest around Rs 2,500 crore (BPCL’s share) to set up the terminal,” said another company executive.

During financial year 2010-11, the company had announced five oil and gas discoveries in Mozambique, Brazil and Indonesia, from exploration blocks where BPCL’s wholly-owned subsidiary, Bharat PetroResources Limited (BPRL) had participating interest.

At present, BPCL markets one million tonnes re-liquefied natural gas (RLNG) per annum from Dahej (Gujarat) and is expected to market two million tonnes from the upcoming Kochi LNG terminal. The executive said BPCL aims to market six million tonnes per annum of RLNG in the next five  years.

BPRL is a Videocon-BPCL consortium with 20 per cent share in the Rovuma Basin block, off the coast of Mozambique in southern Africa. The consortium has been eyeing the growing domestic energy market. Both companies had earlier told Business Standard they planned to bring natural gas from Mozambique to India.

The 8-10 trillion cubic ft of gas in the Windjammer well of the Rovuma Basin block is touted as one of the world's biggest finds.

Texas-based Anadarko Petroleum holds 36.5 per cent stake in the block, with Britain's Cove Energy and Mitsui E&P Mozambique holding 8.5 per cent and 20 per cent, respectively. The balance 15 per cent is held with Empressa Nacional De Hidrocarbonetos (ENH), the national oil company of Mozambique. If BPRL and Videocon plan to bring gas to India, they would have to put up a liquefaction plant in Africa to transfer the gas.

Considering the gas is close to the Indian Ocean, India is a viable market for it. Videocon and BPCL had acquired their stakes in the basin from Anadarko in August 2008. While Videocon paid $75 million for its share, BPCL's share was not revealed.

BPCL is also looking at options to buy a stake in some of the proposed terminals in different parts of the country, the company said.