NEW DELHI Petronet LNG Ltd. (PLNG.NS) will invest 45 billion rupees to build a liquefied natural gas (LNG) terminal on India's east coast by 2016 to help meet the growing demand of the energy-hungry nation.
Companies are building LNG import and regasification facilities on the east coast to meet demand of eastern and central part of India as plants are now located only on the west coast.
Petronet, partly owned by GAIL (GAIL.NS), Indian Oil Corp (IOC.NS) and refiner Bharat Petroleum Corp (BPCL.NS), has signed an agreement with Gangavaram Port Ltd. to build the 5-million-tonne-a-year plant in southern Andhra Pradesh state, the gas importer said in a statement on Wednesday.
Problems at the D6 block, off India's east coast operated by Reliance Industries (RELI.NS), have curtailed domestic output while state-run Oil and Natural Gas Corp (ONGC) struggles to arrest declining production from its ageing field.
Asia's third-largest economy is scouting for long-term LNG contracts to help power electricity generation, fertiliser production, city gas distribution and industries.
Gas accounts for about 10 percent of India's primary energy basket versus the world average of 24 percent, and the country's gas demand is expected to grow at 14 percent in the next five years, P ri me Minister Manmohan Singh said in September.
India aims to increase its LNG handling capacity to 50 million tonnes a year by 2017 from 13.5 million tonnes now, Oil Minister Jaipal Reddy said in March.
Petronet buys 7.5 million tonnes of LNG under a long-term deal with Qatar at Dahej and has tied up 1.5 million tonnes of LNG annually from Australia's Gorgon project from 2014 for its Kochi plant.
India aims to double its LNG imports from Qatar and has sought 3 million tonnes of LNG for immediate requirement in the country.
Petronet operates a 10 million tonnes a year LNG terminal at Dahej in western Gujarat state and plans to commission a 5-million-tonne-a-year terminal by December on the west coast at Kochi, in southern Kerala state.
India has an LNG terminal on the west coast at Hazira in Gujarat, while commissioning of Dabhol LNG plant on the west coast is imminent.
Last month, French utility GDF Suez GSZ.PA signed a deal with Andhra Pradesh Gas Distribution Corporation for developing India's first floating LNG terminal.
State-run Indian Oil Corp (IOC.NS) is also building a 5 million tonnes per year LNG terminal at Ennore in southern India, which is expected to come online by 2014.
(Reporting by Nidhi Verma; editing by Malini Menon; editing by Malini Menon)
New RBI chief's policies to broadly echo Rajan's: Reuters poll
BENGALURU Indian monetary policy is likely to stay broadly unchanged when Urjit Patel takes over as Reserve Bank of India governor, according to a Reuters poll, but his approach to cleaning up public banks' bad debts could be less stringent.
Interview: Oil market rebalancing could take until end 2017 - Shell
STAVANGER, Norway The huge global oil oversupply that has weighed on prices for the past two years may not clear until the second half of 2017, Shell's chief energy adviser Wim Thomas told Reuters.
Wall St. gains as data points to budding economy
NEW YORK Financial and commodity-sector stocks led the S&P 500 higher in a low-volume session on Monday after consumer spending rose for a fourth straight month, pointing to a pick-up in U.S. economic growth.