GAIL in talks with Interoil for stake in Papua New Guinea project

GAIL in talks with Interoil for stake in Papua New Guinea project
PTI
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First Published: Mon, Mar 22 2010. 03 36 PM IST
Updated: Mon, Mar 22 2010. 03 36 PM IST
New Delhi: State-owned gas utility GAIL India on Monday said it is talking to Canadian oil firm Interoil Corp for a possible stake in its proposed liquefied natural gas project in Papua New Guinea.
“We are examining the possibility of having a stake in the Papua New Guinea LNG terminal,” GAIL chairman and managing director B C Tripathi told reporters on the sidelines of the 6th Asia Gas Partnership Summit in New Delhi.
Papua New Guinea last year granted initial approvals for the Pacific nation’s second LNG project, which would follow a plant proposed by an Exxon Mobil Corp-led venture.
The venture would cost about $5 billion for a plant producing 3.5 million tonnes a year of LNG, with shipments due to start in 2014.
LNG is natural gas chilled to liquid form for transportation by tankers to destinations not connected by pipeline.
“We are in discussions with Interoil... it is at a preliminary stage and I cannot say what stake GAIL can get,” Tripathi said. “A lot will depend on due diligence.”
China National Offshore Oil Corp - China’s biggest offshore petroleum explorer, is already working with Interoil and the Papua New Guinea-owned Petromin PNG Holdings on commercial terms for financing the government’s stake in the project.
It is, however, not clear if China National Offshore Oil Corp, the Beijing-based parent of the Hong Kong-listed Cnooc, would take a stake in the project.
Tripathi said GAIL has been shortlisted by Nigeria for its $30-billion National Gas Master Development Plan and its implementation.
“Three consortium’s have been shortlisted. We are in consortia with Total (of France), Royal Dutch/Shell and a Nigerian company,” he said.
The shortlisted firms would be invited to make offers for execution of Nigeria’s gas master-plan which calls for investments of over $30 billion in developing reserves and transporting them to users such as those in power sector and also making liquefied natural gas (LNG) for exports.
Nigeria is estimated to hold 184 trillion cubic feet of gas reserves, most of which remains unexploited. The shortlisted companies would be invited to build three major gas gathering plants and pipelines that would supply fuel to the power sector. It also involves linking the pipeline to a pipe across the Sahara Desert to supply gas to Europe.
The bulk of the country’s gas is exported through the 22- million tonne a year Nigeria LNG plant on Bonny island, or is flared.
Tripathi said GAIL has also expressed its interest in setting up of petrochemical plants, LPG plants and LPG transportation pipelines in Nigeria.
GAIL is also talking to Ghana for setting up pipelines and city gas distribution in that country.
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First Published: Mon, Mar 22 2010. 03 36 PM IST