LNG

Indian liquefied natural gas imports surged for another month by just over 12 percent and by more than 14 percent for the fiscal year so far, helped by lower prices and higher demand and despite more competition from increased output from Bay of Bengal domestic gas resources.

Petronet LNG, the state-backed owner of the largest Indian import terminal at Dahej in the West Coast state of Gujarat and a smaller facility at Kochi terminal in the southwest state of Kerala and with plans for a third terminal, is set to sign new long-term supply agreements with Qatar.

Petronet currently has three agreements it is renegotiating with QatarEnergy to extend beyond 2028 for 20 years or more.

Shareholders in Petronet, which began operations in 2004, have one agreement with Qatar to supply 5 million tonnes per annum, a second from 2009 for 2.5 MTPA and a third from 2016 for 1 MTPA.

The third deal is with the actual shareholders in Petronet - rather than the Petronet entity. These shareholders comprise the biggest Indian energy players GAIL India, Indian Oil, Bharat Petroleum Corp. and Oil and Natural Gas Corp.

The new deals are expected to be consolidated into two agreements instead of three. They would be for Qatari volumes in one deal of 7.5 MTPA and a second for 1 MTPA of cargoes.

Close to deal

“We are pretty close to signing the deals,” said Indian Oil Secretary Pankaj Jain in a statement.

At present, Petronet buys the 8.5 MTPA from Qatar with pricing based on a slope of about 12.67 percent of Brent crude plus a fixed charge of about 50 cents per million British thermal units and is apparently seeking better or similar terms.

Petronet also confirmed at the end of December 2023 that it was going ahead with a third import facility and its first on the East Coast at the Port of Gopalpur in the state of Odisha.

The company has proposed having a floating LNG facility at Gopalpur before converting to an onshore terminal. 

The total capacity of existing terminals in India rose in 2023 to 47.7 MTPA with the addition of the Dhamra terminal in Odisha owned by French major TotalEnergies and the Indian Adani group.

The new Petronet facility at Gopalpur would be India’s eighth, though would be only be the third located on the East Coast and the second in Odisha.

“Petronet LNG Ltd (PLL) has executed binding transaction documents and sub-lease deed and a Port Service Agreement with Gopalpur Ports Limited on December 27, 2023 for setting up of floating storage regasification unit (FSRU) with capacity of 4 MTPA (Phase-1), with provision for converting to 5 MTPA land-based terminal at Gopalpur Port,” said the company in its end-of-December statement .

Out of the seven Indian terminals operating the largest is Petronet’s onshore terminal at Dahej, located north of Mumbai and with capacity of 17.5 MTPA.

Petronet’s Kochi facility in the southwest state of Kerala has capacity of 5 MTPA, though is under-utilised because of a shortage of pipeline connections to markets.

Earnings

Petronet reported consolidated net profits at the end of October 2023 of 818.10 crore Indian rupees ($98.24 million) for the second quarter of the fiscal year compared with 744.25 crore rupees ($89.37M) in the second quarter of 2022 and 789.85 crore rupees ($94.85M) in the previous 2023 quarter to the end of June.

The company’s consolidated revenues from operations were much lower this year than last because of higher prices that prevailed in 2022.

The fiscal second-quarter revenues dropped by over 22 percent to 12,532.57 crore rupees ($1.30 billion) from 16,079.97 crore rupees ($1.93Bln) reported in the same quarter of last year.

However, the fiscal second-quarter income was higher than the 11,656.38 crore rupees ($1.39Bln) logged in the April-June quarter of 2023.

Trelleborg of Sweden, a maker of liquefied natural gas transfer and mooring equipment, has received certification from the Petroleum and Explosives Safety Organization of India as the Asian nation moves to develop more LNG terminals on the East and West Coasts with highest-grade safety standards.

Trelleborg said its marine Quick Release Hook mooring systems received the certificate from the body that sets the rules for equipment containing electrical systems at new or upgraded LNG facilities in the country.

The certification signifies Trelleborg is now the largest accredited docking and mooring equipment manufacturer in the region.

“We set out on a 12-month initiative with our certification agent and support from key supply chain partners, to record technical documentation regarding all electrical systems and enclosures needed to be assessed for hazardous area operation suitability,” said Richard Hepworth, President of Trelleborg’s marine and infrastructure operations.

“As a result, we are delighted that Trelleborg Quick Release Hook mooring systems are now certified for use in the Indian market, and are therefore fully compliant with Indian laws and regulations that govern the operation of LNG facilities,” added Hepworth.

“As the largest accredited docking and mooring equipment manufacturer, customers in the region requiring Quick Release Hooks can be confident that our equipment is certified and meets all safety standards,” he stated.

Hepworth noted that the accreditation means that engineering companies and LNG terminal owners in India can avoid unforeseen budget overruns and schedule delays due to compliance issues.

Safety is paramount across the oil and gas industry with a particular focus in the LNG sector.

Transportation of combustible materials must be managed carefully to avoid the release of gases or vapors into the environment, which can potentially result in explosions, serious injury to personnel and damage to equipment and assets in the surrounding area.

“Trelleborg applies this philosophy at every interface across the LNG transfer chain,” said the company.

“Building on decades of experience in the LNG industry, Trelleborg is an experienced and reliable partner to optimize the business model of any LNG transfer operation and support safe, efficient and cost-effective performance,” it added.

“With standards and guidelines for equipment utilized in port operations developed by industry bodies in many countries and regions, it is vital that operators ensure their terminals meet the highest safety standards anywhere in the world,” Trelleborg declared.