Indian state-controlled importer Petronet LNG plans to expand capacity at the Dahej terminal to 22.5mn t/yr and boost use of the 5mn t/yr Kochi facility after completion of a key gas pipeline.
Petronet will add capacity in two phases to the existing 17.5mn t/yr Dahej in Gujarat state on the west coast, said company chief executive AK Singh. It will add 2.5mn t/yr in the first phase within three years, with another 2.5mn t/yr in the second phase in another three years. It will also add another two storage tanks.
The completion of the Kochi-Mangalore pipeline will help increase operational capacity of the Kochi terminal in Kerala state on the southwest coast to 30pc by March 2022 from around 20pc now, Singh said. State-controlled fertilizer and petrochemical producers in Mangalore are buying LNG from Petronet with state-controlled refiner MRPL, also based in the city in southwest India's Karnataka state, expected to start purchases soon.
Capacity utilisation of Kochi will increase to 50-80pc once a pipeline to Bengaluru in Karnataka is ready. This pipeline has been delayed because of protests in neighbouring Tamil Nadu state but Petronet expects the project to be completed by the end of this year. Petronet will become linked to the national gas grid at Bengaluru.
Dahej utilisation was lower in the October-December quarter by 9pc from the previous quarter at 222 trillion Btu because of record spot rates this winter. Use at Dahej has picked up to full capacity from 80pc in January as spot rates have fallen, with the company expecting a glut in the LNG market this summer.
Singh forecasts prices of LNG to stabilise by mid-year at $5/mn Btu from $30/mn Btu levels during the northern hemisphere winter. Petronet has most of its purchases tied up in term contracts that cost the company around $7/mn Btu as they are linked to crude. This allowed it to supply its customers this winter without interruptions, although some spot purchases were affected.
Petronet also has plans to build a new LNG import terminal on the east coast at Gopalpur in Odisha state. India is adding gas infrastructure so to more than double the share of gas in the country's energy mix by 2030 to 15pc from the current 6pc. Petronet is also building 50 LNG refuelling stations to supply trucks along the country's highways.
