Mumbai (Platts)--28Feb2011/206 am EST/706 GMT

India's Petronet LNG is looking at the possibility of setting up an import and regasification terminal on the east coast, Amitava Sengupta, the company's director of finance, told Platts late last week.

Currently, Petronet LNG has an import and regasification terminal at Dahej in the western Indian state of Gujarat with a capacity of 11.5 million mt/year and is setting up a 5 million mt/year terminal at Kochi in the south.

"We have just commissioned a study on the probability of an east coast terminal," Sengupta said without giving any details of its size or a time frame for the project.

India's east coast is a major market for natural gas after Reliance Industries Ltd. started production from the giant KG D6 fields in April 2009.

There is scope for LNG import and regasification on the east coast even if domestic supply of natural gas goes up once state-owned Oil and Natural Gas Corp. and Gujarat State Petroleum Corp. commercialize their discoveries on the eastern coast and RIL ramps up production from D6 fields, Sengupta said.

Expansion of the Dahej terminal and commissioning of the Kochi facility are expected to lift Petronet's capacity to 20 million mt/year by 2013, Sengupta said.

Apart from building a second jetty at Dahej to receive larger LNG tankers, the company is also looking at additional storage tanks.

It is talking to GPSC and bulk consumers in Gujarat to take part in setting up tank farms, Sengupta said. Consumers would be guaranteed LNG supply in exchange for participation in the tank farms, he said.

Meanwhile, GSPC on its own is looking at a 5 million mt/year LNG terminal at Mundra in Gujarat in partnership with private port owner Adani Group. Refiner Indian Oil Corp. is also carrying out a feasibility study for a 2.5 million mt/year LNG regasification terminal that can be expanded to 5 million mt/year at Ennore near Chennai on the east coast.

Shell operates a 3.6 million mt/year terminal at Hazira on a merchant model, also in Gujarat. Petronet LNG has long-term contracts with Qatar's RasGas to buy 7.5 million mt/year.

For the Kochi terminal, the company has a long-term contract with the Gorgon LNG project in Western Australia to buy 1.5 million mt/year of LNG for 20 years.

The major shareholders in Petronet are state-owned GAIL, ONGC, IOC and Bharat Petroleum Corp. Limited, each with 12.5% equity. France's GDF holds a 10% stake and the Asian Development Bank 5.25%, with the public holding the remaining 34.8%.

--M.C. Vaijayanthi, newsdesk@platts.com

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