Amoco Set For Second Coming, Commits $4bn In Lng Venture
Amoco Corp, the US energy and chemicals giant which pulled out of India last year after a vain attempt to get a share of the Bombay High enhanced recovery programme, is prepared to forgive and forget. And as befits a Texas (Houston)-based company, it wants to do so with mega bucks.
Amocos board has committed to an investment of $4 billion (approximately Rs 15,000 crore) towards a facility to produce daily 5 million tonnes of liquefied natural gas (LNG) from Qatars vast reserves, to be shipped to the Hazira power refineries and petro-chemicals complex, where Indian giants like Reliance, Essar, L&T and NTPC are setting up a host of projects. Amoco will invest Rs 2,000 crore ($650 million) towards a regassificiation plant at Hazira.
The LNG is to be used for creating a power generation capacity of approximately 4,000 mega watts (mw) at Hazira. This, in turn, will call for an additional investment of $4 billion, in which, again, Amoco would be interested. And as is customary in this business, Amoco will look for partners in the entire value chain: from exploiting the gas reserves to transporting (LNG is typically cooled to -164 degree centigrades, at which point it turns into a liquid which is either pumped through a pipeline or transported in specially designed tankers), storing, regassifying and producing power.
Sharing Amocos plans with a small group of journalists here yesterday was Rebecca A McDonald, president of the companys natural gas group. The Indian project, emphasised senior vice-president David C Nagel, was at a very preliminary stage. All that has been decided is that Amoco has taken a decision at the highest level to make this investment, said Nagel.
Ground work for the investment was done over the last two years by a group led by Nagel, who heads the international gas marketing and business development unit of the natural gas group of Amoco, and Raj Puri, managing director for India with one feet still planted in Houston.
Amoco Corp (assets base: $33 billion) has business interests in three sectors: exploration and production (E&P) of fossil fuels, petroleum products and chemicals. E&P, according to McDonald, contributed 65 per cent of Amocos profits in 1996. Half of that came from natural gas. Amoco is the largest natural gas reserve holder in the US and Canada and produces 5 billion cubic feet of gas world wide every day.