NEW DELHI (Reuters) - India's Petronet LNG Ltd PLNG.NS has no plans to invest in liquefied natural gas (LNG) developers as the market is awash with cheaper fuel, its finance chief said, indicating it may shelve plans to invest in Tellurian Inc's TELL.O U.S. project.
Petronet, the country’s top gas importer, has time until December-end to consider investing $2.5 billion for 5 million tonnes per annum (mtpa) of LNG in Tellurian’s Driftwood project to end-2020.
“Right now, we get LNG at throwaway prices so there is no need to go for an investment ... you should be more concerned with LNG than investment,” VK Mishra said at an analyst conference on Thursday.
This is a non-binding memorandum of understanding and there is no commitment, Mishra said, adding that the company is in talks for new long-term LNG contract linked to spot prices.
India has been scouting for cheap gas for price-sensitive consumers as Prime Minister Narendra Modi wants to raise the share of natural gas in the national energy mix to 15% by 2030 from the current 6.2% to reduce pollution.
Petronet has a deal to purchase 7.5 mtpa of LNG from Qatar and 1.44 mtpa from Exxon Mobil Corp's XOM.N Gorgon project in Australia.
Spot LNG prices are currently high due to the surge in demand during winters, he said, adding that the prices would drop to $4-$6 per million British thermal units (mmbtu) after January.
To meet India’s growing gas demand, Petronet is looking at constructing a new LNG terminal on the country’s east coast and also plans to raise annual capacity at its Dahej terminal in western India to 19.5 million tonnes from 17.5 million tonnes.
Petronet is also awaiting for a final approval from Sri Lankan authorities to build a floating LNG terminal in the island nation for about $300 million, Mishra said.
Reporting by Nidhi Verma, Editing by Sherry Jacob-Phillips
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