Petronet plans Rs 2,300-cr expansion at LNG terminal

Petronet LNG Ltd (PLL) plans to invest Rs2,300 crore to install two more storage tanks at its LNG receiving and regasification terminal at Dahej in Gujarat.

The Dahej terminal has four tanks and with the addition of two storage tanks, the total capacity will go up to 15 million tonne per annum (mtpa) from 10 mtpa at present. The tanks are used for storage and regasification.

“We are looking at expanding the storage capacity at Dahej. We have initiated talks with the Gujarat government on this already,” a senior PLL executive told Business Standard.

The company would fund the installation through internal accruals. “Funding is not a problem. We have enough funds to support this. We can also look at debt financing if we desire,” the official said.

Meanwhile, PLL, on its website, said it had initiated the process for setting up a second LNG jetty at Dahej. The jetty is required for risk mitigation and to berth higher capacity LNG vessels. Two years ago, PLL had signed a memorandum of understanding (MoU) with the Gujarat government for expanding its capacity at Dahej.

“We had two years ago signed, an MoU with the Gujarat government, seeking their help in expansion of the terminal. We are just revisiting that arrangement. However, availability of land is a big issue. Only land available for expansion is forest land. We are in talks with the government for additional land,” said the official.

PLL, a joint venture of GAIL India, Oil and Natural Gas Corporation, IndianOil Corporation and Bharat Petroleum Corporation, has a 20 per cent share in the Indian gas market. The company is setting up a 2.5-mtpa terminal at Kochi. The terminal is likely to be commissioned by mid-2012.

For the Kochi terminal, PLL has already signed a long-term gas supply contract with Exxon Mobil for LNG from its Gorgon field in Australia and there is a possibility of contracting more.