Mumbai: Britain’s BG Group Plc. plans to sell imported liquefied natural gas (LNG) in India later this year, and is keen to expand its city gas business in the energy-starved country, the head of its Indian unit said.
BG owns stakes in oil and gas exploration and production blocks, as well as in city gas distribution firms in India.
“The Indian market is maturing, and we understand this year it has paid a higher price for LNG as compared to the eastern markets,” Kapil Garg, managing director at BG India, told Reuters on Wednesday.
Indian fertilizer and power firms are increasingly seen switching to LNG or natural gas from costlier naphtha as feedstock.
“It has a lot to do with persistently high oil prices, which have resulted in higher prices of liquid fuels such as naphtha,” Garg said.
BG India is in talks with Royal Dutch Shell and India’s Petronet LNG Ltd to use their LNG regasification terminals in western India, he said.
“We are talking to Shell and Petronet constantly to see if they have any slot in between,” Garg said, in his first media interview after taking over as BG India’s head last November.
He said BG India had imported a few LNG cargoes in 2007 to test the market and had directly sold them to Shell.
Shell operates a 2.5 million tonnes a year terminal in Hazira while Petronet LNG runs a 6.5 million tonnes a year facility in Dahej, both in the western state of Gujarat.
Garg said BG India’s unit, BG India Energy Services Ltd, planned to import at least one cargo a month later this year, as soon as the two terminals expand their capacities.
Shell plans to raise annual capacity to 3.5 million tonnes in the next few months, while Petronet aims to increase output to 10 million tonnes by December.
Garg said LNG cargoes would be sourced on spot basis from BG Group’s LNG production projects in Egypt and Trinidad and Tobago.