RIL in 2 year LNG pact with Hazira LNG

RIL in 2 year LNG pact with Hazira LNG

New Delhi: Reliance Industries Ltd (RIL), in a multi-billion dollar deal with BP, has signed a two-year contract with Hazira LNG Pvt Ltd to import a spot liquefied natural gas (LNG) from April, two sources said.

The UK-based oil major has announced plans to buy a 30% stake in 23 of Reliance’s oil and gas exploration blocks in India and the two firms have decided to form an equal joint venture for sourcing and marketing of gas.

The sources on Tuesday said under the deal, signed in the December quarter, Reliance would import a cargo every month from April and buy regassified LNG equivalent to a spot cargo from the 3.6 million tonne a year Hazira terminal on the west coast.

“Reliance needs gas for its plants as its D6 (producing block) gas is mainly allocated to other companies," one of the sources said, on condition of anonymity.

Reliance needs gas for west India based Jamanagar refining complex that can process 1.24 million barrels per day -- the biggest in the world -- and its petrochemical plant.

Royal Dutch Shell through its unit Shell Gas owns a 74% stake in Hazira LNG, while Total Gaz Electricite France, a unit of France’s Total, holds the remainder.

No comment was available from Reliance and Hazira LNG.

It is not clear if the LNG cargoes will be imported by the joint venture or the Indian firm alone.

The joint venture should be operational in three to six months, BP India head Sashi Mukundan said last week, to meet growing demand in the world’s second-fastest growing major economy.

According to BP’s Energy Outlook 2030, India’s daily gas consumption in 2010 was estimated at 6.1 billion cubic feet (bcf) and is expected to exceed 15 bcf in 2030.