Govt Sources: BG Group May Join GSPC Regas Terminal Project

AHMEDABAD: Gujarat hopes to reap quick dividends from the softening stand of the British government towards Chief Minister Narendra Modi as the UK's BG Group has initiated talks to team up with a state venture for a Rs 4,000-cr LNG terminal in the state.

Government sources said that state-run Gujarat State Petroleum Corporation (GSPC) and the UK-based BG Group are negotiating a deal to commission a terminal to import 5MT a year of liquefied natural gas.

GSPC has already concluded a deal to buy BG's controlling stake in the city-gas distribution venture in the state, Gujarat Gas Company Limited (GGCL). GSPC is country's largest LNG trader with revenues of Rs 8,500 crore. It is planning a terminal at Mundra, which can be expanded to a capacity of 20 mtpa. GSPC and Adani Group hold 50% and 25% stake, respectively, in GSPC LNG Limited. They have been scouting for strategic partner to offer 25% stake in the proposed Rs 4,000-crore project in first phase. However, GSPC and Adanis lack exposure in managing regasification facility.

BG is an established player in the business and has facilities in Egypt and Trinidad and Tobago and is developing a plant in Australia. Its regasification facilities are operational in the US, the UK and Chile. In 2011, BG sold 12.8 mtpa LNG and delivered 208 cargoes.

Last week, the British government decided to end its no-contact policy with the Gujarat after 2002 riots. It is aiming at exploring opportunities for closer cooperation with Gujarat. Request anonymity, a top government of Gujarat official engaged with the energy department revealed that GSPC is in talks with BG among other players for LNG project partnership.

"There is a strong possibility of GSPC - BG partnership as governments of Gujarat and UK are keen to have mutually beneficial cooperation. It will enable BG Group to continue to have association with Gujarat. We don't rule out possibility of discussions related to GSPC - BG partnership for LNG project when British envoy led by High Commissioner James Bevan meets Gujarat CM soon," said the official. GSPC has appointed UK based Whessoe Project Limited as project management consultant.

This month, sole bidder GSPC inked an agreement with BG to acquire its 65% stake in city gas distribution major GGCL for Rs 2,460 crore. It was amidst accusations of Gujarat government mistreating BG by discouraging possible bidders for GGCL. However, equity deal for LNG project may discard this charge.

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Petronet to Commission Second Import Terminal at Kochi

NEW DELHI: Petronet LNG, a privately registered firm promoted by state-run oil companies for importing gas in ships, would commission its second import terminal at Kochi in Kerala by the first quarter of 2013 calendar year and expand the capcity of its Dahej facility to 15 million tonne by 2015.

The company would also build a third terminal for importing gas in ships and at Gangavaram in Andhra Pradesh, according to company CEO A K Balyan. The cmpany had on Friday reported its highest quarterly profit at Rs 315 crore in the July-September period on the back of better margins and operational efficiency. ""We operated (the 10 million tonne a year) Dahej import terminal at 106% capacity during the quarter,"" Balyan said while announcing a 21% rise in quarterly profit on Friday.

He said the Kochi the terminal will operate only to less than a fifth of its 5 million tons a year capacity as the off-take infrastructure is not yet ready.

State-owned gas utility GAIL India is laying pipelines connecting the Kochi terminal to consumers in two phases - the first phase connecting four consumers like Kochi refinery and FACT Tranvancore would be completed by December-end. Upon this, the Kochi LNG terminal will be comissioned but it will operate at only 0.5-1 million tons capacity for the first year due to limitation of gas off-take.

The second-leg of the pipeline which will connect Kochi to Bangalore and Mangalore is expected to be completed by next year end, he said adding Kochi terminal would operate at full capacity thereafter.

Import volumes remained flat at 135 trillion units but there was a 5% increase in margin it gets on turning liquid gas back into its gaseous state. Also, the firm got better trading margins on cargoes.

Turnover rose 41% to Rs 7,549 crore. The company had a forex gain of Rs 114 crore against a loss of Rs 52 crore, year-on-year.

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