Petronet may look at building 4th LNG import terminal

Petronet LNG Ltd, the operator of the world's largest liquefied natural gas (LNG) import terminal, may look at setting up a fourth facility in the country to meet the rising energy demand in Asia's third-largest economy, its CEO A K Singh said.

Petronet operates a 17.5 million tonnes a year LNG import facility at Dahej in Gujarat and another 5 million tonnes facility at Kochi in Kerala. It is looking to set up a floating LNG import terminal at Gopalpur in Odisha in the next 3 years at a cost of Rs 1,600 crore.

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"We believe gas demand will continue to grow and we will need avenues to meet such requirement," he told PTI in an interview.

With limited domestic production, gas demand will have to be met through imports.

"We could possibly look at setting up a fourth LNG import and regassification terminal," he said without giving details. "These are preliminary thoughts and we will come back to you once plans are firmed up."

Natural gas consumption will have to rise to over 500 million standard cubic meters per day from the current 165 mmscmd to achieve the government's goal of raising the share of natural gas in the country's primary energy basket to 15 percent by 2030 from the current 6.7 percent.

With domestic production of gas barely meeting half of the current consumption, import of gas in the form of LNG will have to grow.

According to Shell, India would need 35 to 40 million tonnes of additional LNG imports between 2020 to 2040. (1 million tonnes of LNG is equal to 3.60 mmscmd).

Besides Petronet's terminals, India currently has an operational import facility at Hazira and Mundra in Gujarat, Dabhol in Maharashtra and Ennore in Tamil Nadu (all 5 million tonnes per annum capacity each).

Singh said Petronet plans to make a foray into the petrochemical business by investing Rs 12,500 crore in a Propane Dehydrogenation Plant at Dahej to convert imported feedstock into propylene.

"We plan to build a jetty at Dahej for import of ethane and propane. While propane will be used as feedstock for our petrochemical plant, ethane will be for sale to petrochemical plants of other companies such as that of OPAL," he said.

This jetty will cost Rs 1,650 crore and will take three years to build.

Petronet will invest Rs 600 crore in raising the capacity of the Dahej LNG import terminal to 22.5 million tonnes per annum from the current 17.5 million tonnes, Rs 1,245 crore in building an additional storage tank and bays for truck loading of LNG.

The Dahej import terminal is the largest in the world and the port will host the third jetty that besides propane and ethane, will also be used for LNG imports, he said.

Petronet will set up a 4 million tonne a year floating storage & regasification (FSRU)-based LNG import facility off the Gopalpur port that later will be turned into a land-based terminal with a higher 5 million tonne capacity, with scope for raising it in future, he said.

The company had some years back planned to set up a terminal at Gangavaram in Andhra Pradesh for the import of supercooled gas in ships. The company management stopped pursuing that terminal in 2015-16 on grounds that there isn't enough demand to justify a 5 million tonne a year import facility.
Gangavaram would have been the first terminal on the east coast.

Soon after that, Adani Group began work to set up a 5 million tonne a year import terminal at Dhamra port in Odisha.

Petronet now sees that there is demand for gas in the eastern region and despite the Dhamra LNG terminal, it is now looking for a facility at Gopalpur.

Petrochemicals, made using crude and natural gas as feedstock, form raw material for plastics, packaging material, and personal care products.

In terms of volume, the petrochemical market in India stood at 42.50 million tonnes and is estimated to reach 49.62 million tonnes by 2025, expanding at a compound annual growth rate (CAGR) of 6.14 percent between FY 2021 and FY 2025. Using ethane, plastics and detergents can be made; while propane can give plastic.

Petronet is 50 percent owned by state-owned refiners Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL), gas utility GAIL (India) Ltd and oil and gas producer ONGC. The four companies sit on the board of the company, which is headed by the Secretary, Ministry of Petroleum and Natural Gas.