LNG

Aker Solutions of Norway has signed a contract with the Norwegian-based development company Crown LNG for front-end engineering and design for the proposed Kakinada regasification and import project proposed for offshore the East Coast of the Indian state of Andhra Pradesh and for all-year operations in the Bay of Bengal.

BP of the UK and one of India’s largest conglomerates, Reliance Industries, are on track for first gas from mid-2020 from projects developed to open up new Indian production when the nation is also increasing its LNG imports.

The RIL-BP joint venture has committed an additional $5 billion of investments towards monetizing about 3 trillion cubic feet equivalent of natural gas, or 500 million barrels of oil equivalent, from reserves in three projects.

The projects are named, R cluster, Satellite cluster and the MJ fields.

“These projects will utilize the existing gas production infrastructure. Further, this infrastructure can act as a hub for development of any discovery from contiguous areas,” said the BP-RIL partnership.

BP and Reliance sanctioned the projects in natural gas fields in the Krishna Godavari Dhirubhai offshore the East Coast of India.

India's Krishna-Godavari Basin covers more than 19,000 square miles offshore the state of Andhra Pradesh in the Bay of Bengal.

The KG-D6 block was Reliance’s first offshore gas field development and its first underwater discovery. It was also India's largest deposit of natural gas when first found in 2002.

“The first-gas from these fields is expected in mid-2020,” they stated.

“The peak production from these three fields is expected to reach 1 BCFe per day which is about 15 percent of envisaged Indian demand,” they explained.

The RIL-BP joint venture also confirmed that it had completed the safe cessation of production in a planned manner, from the D1 D3 field in Block KG D6, also off the East Coast.

India consumes more than 5 billion cubic feet a day of natural gas and aspires to double gas consumption after 2022.

The offshore gas supplies will be in addition to LNG imports which in December 2019 surged for a ninth month in the current fiscal year as more volumes were imported at a lower cost from countries such as Qatar, the US, Australia and West African nations.

LNG imports for December jumped by 22.7 percent to 2.08 million tonnes compared with the 1.70MT received in December 2018.

The main operating terminals on India’s West Coast are at Dahej, Hazira and Dabhol, near Mumbai. The newest terminal at Mundra is also now operational.

There is also the Kochi facility in the southwest state of Kerala and one East Coast terminal at Kamarajar, 25 kilometres north of Chennai Port in Tamil Nadu. 

India imports about 250 cargoes a year, mainly from Qatar, the US, Russia Australia and Africa.

The import figures also showed that December LNG imports cost India around $800M during the month, less than the $900M spent in December 2018.

The cost of the fuel from April to December 2019 was about $7.1Bln versus $8.0 Bln in the year-ago period.

India's current monthly LNG requirements for the regasification network is around 30 shipments.

The BP-RIL ventures will come on stream as the nation's domestic production of natural gas has been falling. For the month of December 2019, the output was 2.64 billion cubic metres compared with 2.86 Bcm in December 2018, down 7.9 percent.

Indian liquefied natural gas imports rose for a seventh month in the current fiscal year as the increase in volumes gathered pace with cargoes arriving from Qatar and West African nations such as Nigeria and Angola.

Indian liquefied natural gas terminal developer H-Energy and Kakinada Seaports signed an agreement for an LNG regasification and reloading terminal to be sited at Kakinada port in Andhra Pradesh, which would be only the second such facility on the East Coast of India.

Kakinada Seaports controls the concession for the Kakinada Deep Water Port under an agreement with the government of Andhra Pradesh.

“H-Energy shall develop an LNG hub at the Kakinada Port catering to the needs of domestic customers in the state of Andhra Pradesh and shall supply LNG through small LNG vessels to H-energy’s proposed Kukrahati LNG terminal in the state of West Bengal and neighboring countries like Bangladesh and Myanmar,” explained H-Energy.

Darshan Hiranandani, Chief Executive of H-Energy, said the company was excited to partner with Kakinada Seaports for this East Coast project.

“We believe that Kakinada with its existing breakwater and deep draft combined with its close proximity to various natural gas pipelines makes this an efficient and successful project for our customers, our partners, and ourselves,” said the CEO.

“The PSA along with its associated agreements envisages a long-term association between the two organizations contributing towards India’s growth story, especially, the vision of the Government to promote a gas-based clean economy," he added.

Depending on the timing, the Kakinada terminal could be only the second on the East Coast of India after the start-up in March 2019 of the first facility at Kamarajar Port in Tamil Nadu.

The Kamarajar terminal is owned by Indian Oil Corp., the refining and fuel marketing company, and has 5 MTPA of import capacity and two tanks each with storage of 180,000 cubic metres.

The Hiranandani group also has plans to deploy a floating storage and regasification import project at Jaigarh port, south of Mumbai, by the end of 2019.

The H-Energy subsidiary will operate the Jaigarh terminal with annual capacity of 4 MTPA of LNG and with re-loading capabilities.

H-Energy has explained that the FSRU charter to H-Energy is for a period of five years and the ship will arrive at the LNG jetty at Jaigarh just before the start-up.

Most of the onshore infrastructure work has almost been completed by Engineers India Ltd, a project construction company.

H-Energy said the West Coast facility would be of great benefit to Maharashtra state in western India by providing clean fuel for transportation and for city-gas use.

When operational, the regasified LNG will be supplied to customers through the pipeline connected to national gas grids at the city of Dabhol.

The facility would be the fifth LNG import terminal located near Mumbai, with three of them located at Hazira, Dahej and Dabhol for use by importers Shell, Petronet LNG and Gas Authority of India respectively.

A fourth is mechanically completed at Mundra. It is owned by Gujarat State Petroleum and the Adani Group, though has yet to be fully commissioned.

H-Energy also recently signed a cooperation accord with Russian company Novatek, operator of the Yamal LNG plant in Siberia and developer of the Arctic LNG II project.

Novatek said the memorandum of understanding envisaged cooperation in LNG supplies to India on a long-term basis, joint investment in future LNG terminals of H-Energy and in Russian LNG projects.

The Hiranandani conglomerate and Novatek said they also planned to establish a joint venture to market LNG and natural gas to end-customers in India, Bangladesh and other markets.

Indian Prime Minister Narendra Modi inaugurated the Mundra liquefied natural gas import terminal, the third sited in Gujarat state and the fifth on the West Coast of India, while no facilities currently operate on the East Coast.

The energy company owned by the Indian West Coast state of Gujarat that includes the city of Mumbai said it would bring its Mundra LNG import terminal on line by September 2018 while it awaits the signing up of a strategic partner.

BP of the UK and one of India’s largest conglomerates, Reliance Industries, have taken a final investment decision to develop the second phase of a $6-billion deepwater natural gas project to open new Indian production when the nation is also increasing its LNG imports and expanding its regasification and pipeline infrastructure.

Atlantic, Gulf and Pacific Co. of the Philippines, the LNG infrastructure and fabricated modules supply company, said it was making progress in its plans to building up its own LNG project portfolio of small-scale ventures in the Asian and South East Asian regions as it also strengthened its executive team.