ONGC to revive plans for LNG terminal in Karnataka

ONGC, BPCL soon to sign an MoU for putting up LNG terminal at Mangalore

Six years after the $1 billion project was put in cold storage, state-owned Oil & Natural Gas Corp (ONGC) will by this month-end revive plans to set up a liquid gas (LNG) import terminal near its Mangalore refinery in Karnataka.

“In next 10 to 15 days, ONGC and Bharat Petroleum Corp Ltd (BPCL) will sign an MoU for putting up a LNG terminal at Mangalore,” Oil Minister M Veerappa Moily announced at the inauguration of state gas utility GAIL India Ltd’s Dabhol-Bangalore gas pipeline. The 5 million tonne capacity liquefied natural gas (LNG) import facility will be set up through a joint venture of ONGC and BPCL and an international energy firm of repute.

ONGC has already initiated talks with Mitsui Group of Japan of setting up LNG terminal at Mangalore and the two may also strengthen their partnership by further setting up a gas based power plant in India. The Rs 4,500 crore Dabhol-Bangalore pipeline is to be extended to Mangalore by next year and gas imported at the facility can then be pumped into the line for consumption by industries in Karnataka and neighbouring Tamil Nadu.

In 2005, ONGC had plans to build an LNG terminal, which were then shelved in 2006 due to change in leadership. But now the company has again started looking actively at the plan of LNG import, with the clear idea that domestic gas availability at 160 million standard cubic meters per day in 2015-16 will be way short of demand of 290 mmscmd.

Also, Moily, who hails from Karnataka, is pushing the companies to set up the facility. BPCL owns an equity stake in a giant gas field off Mozambique and it can ship its share gas in LNG to Mangalore. “Gas will come from Mozambique,” Moily said.

India has three operational LNG import facilities — a 10 million tonne unit at Dahej in Gujarat operated by Petronet LNG Ltd; a 3.6 million tonne terminal of Shell-Total at Hazira in Gujarat, and a just commissioned 5 million tonne facility at Dahbol in Maharashtra. Despite the minister’s push, there are question marks on the terminal at Mangalore.

The Dabhol LNG terminal, which has government-owned NTPC Ltd and GAIL as partners, was commissioned last month and a similar capacity import facility will come up at Kochi in Kerala this year. LNG imported at Dabhol and Kochi will feed the same market in Maharasthra, Karnataka, Tamil Nadu and Kerala.

Presently, both PLL’s terminal at Dahej, and Shell and Total’s terminal at Hazira in Gujarat are under expansion to 15 million tonne and 5 million tonne capacity respectively. Even Dabhol is proposed to be expanded to 10 million tonne.

Also, GAIL and Shell are putting up separate floating LNG terminal at Kakinada, off Andhra Pradesh coast, while Petronet is building one at Gangavaram in the same state. State-owned Indian Oil Corp (IOC) is building an LNG terminal in Ennore, near Chennai, with a capacity of 5 million tonne at an estimated cost of Rs 4,320 crore.

It is to be commissioned in 2016. Gujarat State Petroleum Corp is also planning to commission an LNG terminal with a capacity of 5 million tonne at Mundra by 2015-16.