LNG

Two Indian state-backed oil and gas companies have signed an accord to develop the Hatta natural gas field in the Vindhyan basin of Madhya Pradesh in Central India, including building an LNG liquefaction plant to supply the off-grid and transportation fuel markets.

The two companies involved are Oil and Natural Gas Corp. (ONGC), a company owned by India’s Ministry of Petroleum and Natural Gas as is its partner in the venture, Indian Oil Corp. Ltd (IOCL) whose activities are focused on refining petroleum products and producing petrochemicals, though both are already involved in the LNG sector.

ONGC and IOCL have signed a memorandum of understanding to establish a medium-sized LNG plant as part of the Hatta gas field development plan.

“The establishment of the Hatta LNG plant will significantly enhance the Vindhyan Basin's status,”  explained ONGC.

“The plant will utilize cutting-edge technology to produce LNG, a cleaner alternative to traditional fossil fuels, significantly reducing carbon emissions and aligning with India's climate change mitigation goals,” ONGC added.

LNG sector

ONGC has subsidiaries already involved in LNG including Hindustan Petroleum Corp., the owner of India’s newest LNG import facility, the Chhara terminal located in the state of Gujarat and with 5 million tonnes per annum of capacity.

Another unit, ONGC Videsh, is one of three Indian companies who share a 20 percent stake in the TotalEnergies-operated Mozambique LNG project Area 1 licence in the Rovuma Basin of the southeast African nation.  

IOCL is also involved in LNG through its ownership of the LNG import terminal at Kamarajar Port in the East Coast state of Tamil Naidu with 5 MTPA of regasification capacity.

Both ONGC and IOCL are additionally associated and founding companies of Indian’s largest LNG importer, Petronet LNG which has West Coast import terminals at Dahej and Kochi.

ONGC said that the gas discovery at Hatta “represented the culmination of five decades of sustained exploration” efforts.

“ONGC has already submitted its Field Development Plan (FDP) to the Directorate General of Hydrocarbons to monetize its assets in the Hatta area,” stated the company.

The establishment of the Hatta gas field and the LNG plant will enhance the Vindhyan Basin’s status, upgrading it from a Category II to a Category I Basin.

India's sedimentary basins, covering a total area of 3.4 million square kilometres, are divided into three categories.

Category I is for basins with hydrocarbon reserves that are already producing; Category II is for resources with commercial production pending; and Category III are prospective areas where resources may be discovered.

Earnings

The submission of the Hatta gas development plan follows ONGC’s record fiscal-year net profits reported in May 2024 and amounting to 40,526 crore Indian rupees (US$4.85 billion).

However, gross annual revenues fell by over 6 percent to 643,037 crore rupees ($76.94Bln) as prices tumbled.

ONGC’s annual realised natural gas price dropped by 10.8 percent for the year to US$6.55 per million British thermal units from US$7.34 per MMBtu in the previous fiscal year.

The average crude oil price declined by 18.4 percent to US$75.91 a barrel from $93.02 per barrel in the 2022-2023 fiscal year.

Indian state company Oil and Natural Gas Corp. (ONGC), whose overseas arm holds a stake in the TotalEnergies-led Mozambique LNG export project, plans to raise by four-fold its domestic exploration and production acreage to find more natural gas and oil in India and cut the bill for imports.

French major Total has declared ‘force majeure’ on the Mozambique LNG export project over growing conflict in the north of the Southeast African nation, leading to workers being withdrawn and doubts increasing over whether security would return soon to the northern Cabo Delgado province.

Australian engineering company Worley said it was awarded two master service agreements by French major Total to provide specialised services for the Mozambique LNG export project at Pemba on the northern coast of the southeast African nation.

“Under the MSAs, Worley will provide in-and-out of country services, including engineering, consulting and specialist engineering for delivery of onshore and offshore (subsea) facilities,” said Worley.

“The services will support the development of the new LNG facility,” the company added.

Worley said the work would be under its local Mozambique operational division with support from Worley’s global businesses, including the consultancy subsidiary Advisian. 

Syndey-based Worley has already supported the LNG development, located on the Afungi peninsula in Mozambique's Cabo Delgado province, since natural gas was first discovered there in 2010. 

Analysts said Worley was a highly experienced LNG and natural gas contractor, having played a leading role in the build-out of Australia's liquefaction plants.

“We are pleased to continue providing services to the LNG development and to support one of Africa’s largest projects,” said Andrew Wood, Chief Executive of Worley.

“Through the MSAs, we will help Total and its partners in the Mozambique LNG Project meet the world’s changing energy needs,” added Wood.

The French company has already said it planned to expand its Mozambique venture with up to two additional processing Trains, taking the total up to four Trains.

Total is looking  at studies for Train 3 and Train 4 because of the huge feed-gas resources offshore Mozambique.

Total confirmed in October 2019 that it paid $3.9 billion to close the acquisition of Anadarko Petroleum’s 26.5 percent operated interest in the Mozambique LNG project from Anadarko purchaser Occidental Petroleum.

Total had previously reached a binding agreement with Occidental to buy Anadarko’s assets in Africa, including Mozambique, Algeria, Ghana and South Africa.

Patrick Pouyanné, Chairman and Chief Executive of Total, has said that Mozambique LNG was a one-of-a-kind asset that perfectly fitted with the company strategy.

Total plans to work on the strong foundations established by the previous operator Anadarko and its partners.

The project includes the development of the Golfinho and Atum fields located within offshore Area 1 of the Rovuma Basin. 

The plant site has already been cleared near the coastal town of Pemba.

The Rovuma Area 1 contains more than 60 trillion cubic feet of gas resources of which 36 Tcf could be developed for a four-Train plant.

The Area 1 shareholder line-up is now as follows: Total operates Mozambique LNG with a 26.5 percent participating interest alongside Mozambican state-owned energy company ENH (15 percent). 

Japan’s Mitsui owns 20 percent, India’s ONGC Videsh, Bharat  PetroResources and Beas Rovuma Energy each hold 10 percent and Thailand’s PTTEP 8.5 percent.

The Total-led venture is Mozambique’s first onshore LNG plant.

Italian energy company Eni is leading a project for the Coral South floating LNG project from Area 4 resources in the Rovuma Basin. 

It is also planning an onshore venture with ExxonMobil and other stakeholders.

The final investment decision on the Mozambique LNG project was announced by Anadarko in June 2019 and the venture is expected to come into production by the start of 2025.