Reliance Industries Ltd (RIL) is considering putting up a US$ 1.2 Bn LNG import terminal on the east or west coast to meet demand at its refineries and petrochemical plants.
According to report, Reliance's requirement of the fuel is around 14 MMSCMD at its twin refineries at Jamnagar in Gujarat . It also needs gas at its petrochemical plants.
The company had first contemplated the facility back in 1997, but plans for a 5-MT per annum port terminal were later held back, the report said. The company had at that time envisaged receipt of LNG transported from overseas via cryogenic ships and a re-gasification of the liquid cargo.
The company is now thinking of reviving the plan as it is not able to use the natural gas from the eastern offshore KG6-D6 field given that its twin refineries at Jamnagar
Reliance is reported to be buying LNG from Royal Dutch Shell at prices that are in double digits as against a delivered price of US$7 per million Btu of KG-D6 gas.
The report said that Jamnagar was the natural choice, but Gujarat already has LNG terminals at Dahej, operated by Petronet LNG and another at Hazira owned by Shell India and Total of France.
According to the report, a third terminal was under planning stage at Mundra by the Adani Group and Gujarat government entity GSPC), and therefore a fourth one in the state looked unlikely.
One option is to set up the facility at Kakinada in Andhra Pradesh and transport the gas via the under-utilised East-West pipeline connecting the landfall point for gas from the eastern offshore KG-D6 field to Baruch in Gujarat .
The pipeline has the capacity to move 100 MMSCMD of gas. However only half the capacity is being used given the production constraints at KG-D6 field, which has an output of 54 MMSCMD at present.
Another option under consideration is using a floating LNG facility that would receive cryogenic ships at high sea and regasify the liquid cargo into natural gas before piping it to shore through a submarine pipeline.
According to the report Reliance's LNG terminal is expected to take 1 1/2 years as against 36-40 months for a normal LNG terminal.
It added that Reliance had also explored the possibility of picking up a stake in Adani's proposed LNG terminal at Mundra, but the two sides failed to reach an agreement.
In 2000 the company had also tied up LNG imports from Iran
Meanwhile, the company has commissioned its business transformation plans for 2012 and has engaged AT Kearny, Booz & Co for the business transformation.
According to reports, Reliance would finalize its US$5 Bn investment plans at Jamnagar
Also the assessment on building and LNG Terminal would only be taken in 2011.
RIL is also said to have revived its talks with British Petroleum to sell a stake in its E&P assets.
