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Petronet leasing out half of Dahej LNG terminal

17th February 2014

Petronet LNG will lease out half of the capacity at its Dahej liquefied natural gas (LNG) terminal to state companies, which is set to begin in 2017

Petronet LNG will lease half of the capacity at its Dahej liquefied natural gas (LNG) terminal

Petronet LNG, a joint venture created by the Indian government to import LNG and build LNG terminals in the country, will lease out half of the capacity at its Dahej liquefied natural gas (LNG) terminal to state companies, starting in 2017, due to the fuel’s decrease in demand, Reuters reported.

Petronet has now concluded 20-year deals to lease a total 6 million tonnes of the Dahej terminal's annual capacity to companies, which include GAIL, India's biggest gas pipeline firm, Indian Oil Corp and Bharat Petroleum Corp.

Petronet, director of finance, R.K. Garg, said his company will also lease 1.25 metric tonnes per annum (MTPA) of capacity to Gujarat State Petroleum Corporation (GSPC) beginning April of this year for 20 years once a second pier at the terminal is operating, likely in March 2014.

He added that "As a terminal operator, it gives me assurance ... that irrespective of price our terminal will operate at full capacity."

Gas demand in India is anticipated to increase to 473 million cubic metres a day (mmscmd) by 2016/17, which is up from 286 mmscmd in 2012/13.

Petronet currently receives 7.5 mtpa of LNG from Qatar's RasGas under a long-term contract and purchases the other 2.5 mtpa under spot and short term deals.

Garg also commented that the amount Petronet buys through spot or short term deals will decrease to 1.25 mtpa in the 2013/14 fiscal year, when the first agreement with GSPC goes into effect.

Petronet will continue using just half of the Dahej terminal's capacity to use LNG from Qatar.

 

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