Petronet to buy 1.5 million tonnes of LNG from Australia

Petronet LNG (PLL), India's largest liquefied natural gas importer, will sign an agreement to buy 1.5 million tonnes of LNG from Australia in August.

PLL is building a 2.5 million tonnes a year capacity LNG import terminal at Kochi, Minister of State for Petroleum and Natural Gas Jitin Prasada said in a written reply to a question in the Rajya Sabha.

"PLL has tied up 1.5 million tonnes a year for Kochi terminal on (long) term basis (from Gorgon project of Australia). Sale Purchase Agreement is likely to be executed in August," he said. "The price of LNG is linked to the then prevailing crude price."

Supply of LNG to Kochi would start in 2014, he said, adding the Kochi terminal would be commissioned in 2011-12.

Petronet had in May concluded term sheets for all agreements for buying 1.5 million tonnes of LNG a year from Exxon Mobil Corp for 20 years, beginning 2014.

Exxon has said it can sell another 1.3 million tonnes of LNG to Petronet but the Indian buyer has not yet committed to additional volumes as it has not tied-up consumers for that.

US energy major Chevron Corp is the operator of the Gorgon project with a 50 per cent stake while Exxon Mobil and Royal Dutch/Shell hold 25 per cent each.

The Gorgon Project plans to develop the Greater Gorgon gas fields, located between 130 km and 200 km off the north-west coast of Western Australia. The Greater Gorgon gas fields contain resources of about 40 trillion cubic feet of gas, Australia's largest-known gas resource.

The agreement will provide for ExxonMobil's subsidiaries, Mobil Australia Resources Co and Mobil Exploration and Producing Australia, to supply about 1.5 million tonnes annually of LNG with the potential for additional supply, for a 20-year term.