LNG

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.

The decline in Indian liquefied natural gas imports slowed to 1.8 percent from the previous month’s 24 percent fall as cargoes for West Asia were expensive when competing with Europe and South America and as Indian domestic gas demand remained flat.

Indian liquefied natural gas imports jumped by 11 percent in February to continue the resurgence in the nation’s natural gas use despite LNG cargo prices being 37 percent higher than last year.

Indian LNG imports continued their 2022 decline though at a slower pace as costs in the year-on-year period jumped 65 percent and domestic natural gas output also began to lose some momentum as the nation’s consumption fell.

Indian liquefied natural gas imports dropped by over 7 percent, even more than in the previous month, as the costs of LNG shipments soared and the nation’s supply security was enabled by offshore domestic natural gas pipeline supplies that jumped more than 26 percent.

Royal Dutch Shell’s subsidiary in India is exploring partnerships with other companies to expand the liquefied natural gas fuel market for vehicles and also expects LNG truck-loading bays to increase in number to enable wider distribution of small-scale volumes.

Indian Oil Corp., the refining and fuel marketing company, has started commissioning the first liquefied natural import terminal on the East Coast of India near the city of Chennai with a shipment from Qatar.

The new terminal is located at Kamarajar Port in the southeast state of Tamil Nadu .

The commissioning cargo was unloaded from the 160,000 cubic metres capacity carrier “Golar Snow” after being lifted from the Qatargas export complex at Ras Laffan on February 17 and delivered to Kamarajar where the vessel was still moored on March 4.

During the cool-down process all the systems and infrastructure at the newest Indian terminal are being made ready to safely receive and handle regular cargoes and regasified LNG.

The storage tanks and all the related terminal equipment were cooled with vapour to take the first cargo.

Indian Oil’s terminal at Kamarajar, formerly one of India’s main coal ports and previously called Ennore, will have annual capacity of 5 million tonnes per annum.

Kamarajar is India’s sixth LNG import terminal and is expected to spur industrial growth in the area with the regasified LNG being distributed to power generation plants, fertiliser plants and other industrial units.

Indian Oil is the main stakeholder in the facility, though other investors have been named as the Indian private equity fund, IDFC Alternatives, and ICICI Bank, part of an Indian multinational banking and financial services company based in Mumbai.

Once the Kamarajar terminal is fully commissioned it will join the five other facilities on the West Coast at Dahej, Dabhol, Hazira, Mundra and Kochi to supply India’s growing natural gas needs.

Analysts said the coming on stream of this first regasification facility on the East Coast is a landmark in Indian Oil's efforts and those of the government to improve natural gas infrastructure in the country.

The Kamarajar terminal is located about 25 kilometres north of Chennai Port and initially the imports will supply natural gas to industry in the Manali area, including Madras Fertilizers Ltd., Chennai Petroleum Corp. and Tamil Nadu Petroproducts.

The venture and several other East Coast terminals under development will rebalance the nation’s regasification infrastructure with East Coast import capability.

Indian Oil is also pursuing city-gas projects and another East Coast LNG terminal with Gas Authority of India and the Adani Group.

With GAIL and Adani, Indian Oil is developing the Dhamra project in the state of Odisha.

The Dhamra terminal will bring in LNG imports to serve city-gas and power projects as well as industrial customers.

Indian LNG imports dropped 5.8 percent in October after six straight month of increases as shipments were received from nations such as Qatar, Angola and Nigeria, while the costs of the cargoes continued to rise for the Asian nation and amounted to about $900 million last month.

Indian LNG imports rose about 10 percent last month, the sixth straight month of increases because of new long-term supply contracts in Australia and the US while the costs of the cargoes also continued to rise for the Asian nation.

Aug 27 (LNGJ) - French energy major Total has signed an agreement to sell 500,000 tonnes per annum of LNG to Royal Dutch Shell over five years on a delivered basis to supply the markets of India and neighbouring countries. “The deliveries will be sourced from Total’s global LNG portfolio and are expected to begin in 2019,” said the French company. The deal is in addition to Total signing an accord with Shell for the sale of its 26 percent minority equity stake in the Hazira import terminal on the West Coast of India, near Mumbai. “This deal enables Total to capture value through an asset disposal, while the LNG sales contract allows us to maintain the balance of our LNG portfolio,” said Philippe Sauquet, Total’s President of Gas, Renewables and Power. “We remain committed to supply the Indian subcontinent, which is a key market experiencing strong growth in LNG demand.”