ONGC to setup LNG import terminal in Karnataka

Oil and Natural Gas Corp (ONGC) to revive plans to set up a LNG import terminal near its Mangalore refinery in Karnataka.

“In next 10 to 15 days, ONGC and Bharat Petroleum Corp Ltd (BPCL) will sign an memorandum of understanding (MoU) for putting up a LNG terminal at Mangalore,” oil minister M. Veerappa Moily announced at the inauguration of state gas utility GAIL India Ltd’s Dabhol-Bengaluru gas pipeline.

The 5 million ton capacity LNG import facility will be set up through a joint venture of ONGC and BPCL and an international energy firm of repute. ONGC has already initiated talks with Mitsui Group of Japan of setting up LNG terminal at Mangalore and the two may also strengthen their partnership by further setting up a gas based power plant in India.

The Rs4,500 crore Dabhol-Bengaluru pipeline is to be extended to Mangalore by next year and gas imported at the facility can then be pumped into the line for consumption by industries in Karnataka and neighbouring Tamil Nadu.

In 2005, ONGC had plans to build an LNG terminal, which were then shelved in 2006 due to change in leadership. But now the company has again started looking actively at the plan of LNG import, with the clear idea that domestic gas availability at 160 mmscmd in 2015-16 will be way short of demand of 290 mmscmd.

Also, Moily, who hails from Karnataka, is pushing the companies to set up the facility.

BPCL owns an equity stake in a giant gas field off Mozambique and it can ship its share gas in LNG to Mangalore.

India has three operational LNG import facilities—a 10 MMT unit at Dahej in Gujarat operated by Petronet LNG Ltd; a 3.6 MMT terminal of Shell-Total at Hazira in Gujarat, and a just commissioned 5 MMT facility at Dabhol in Maharashtra.

The Dabhol LNG terminal, which has government-owned NTPC Ltd and GAIL as partners, was commissioned last month and a similar capacity import facility will come up at Kochi in Kerala this year. LNG imported at Dabhol and Kochi will feed the same market in Maharashtra, Karnataka, Tamil Nadu and Kerala.

Currently, both Petronet LNG Ltd’s terminal at Dahej, and Shell and Total’s terminal at Hazira in Gujarat are under expansion to 15 MMT and 5 million ton capacity respectively. Even Dabhol is proposed to be expanded to 10 MMT.