The regasification liquefied natural gas (R-LNG) terminal with a capacity of 1-3 million tonnes per annum (mtpa), was planned to be expandable to 5 mtpa later
Mumbai: State-run Bharat Petroleum Corp. Ltd (BPCL) may revive its plan to build a terminal for imported liquified natural gas (LNG) amid rising domestic demand for the clean fuel, two people aware of the development said. The regasification liquefied natural gas (R-LNG) terminal with a capacity of 1-to-3 million tonnes per annum (mtpa), was planned to be expandable to 5 mtpa later.
“BPCL is currently deliberating its options for setting up the LNG terminal. It is exploring locations on both the east and west coasts. It may cost BPCL around ₹ 2,000 crore," said the first of the two people cited above.
The public sector oil marketer may consider Kakinada, Krishnapatnam, Mangalore or Gangavaram for the terminal, the first official mentioned above said.
BPCL’s plans to have its own LNG terminal, now five years in the making, have not made much headway. In 2017-18, BPCL formed a wholly owned gas subsidiary Bharat Gas Resources Ltd with a view to focus on natural gas as a separate business.
BPCL, said the second official, may also look at booking capacity in the LNG terminals in the country.
BPCL spokesperson, however, said that currently, it is not considering any such proposal.
BPCL is also a co-promoter of Petronet LNG Ltd, along with Indian Oil Corp. Ltd, Oil and Natural Gas Corp. Ltd and Gail (India) Ltd. It is also a co-promoter of four city gas distribution companies—Indraprastha Gas Ltd in Delhi with Gail; Sabarmati Gas Ltd in Gujarat with Gujarat State Petroleum Corp. Ltd; Maharashtra Natural Gas Ltd and Central U.P. Gas Ltd with Gail.
Given the government’s focus on increasing the share of gas in India’s overall energy mix, and the development of infrastructure in terms of LNG terminals and pipeline connectivity, demand for LNG is positive over the medium to long term, encouraging companies including BPCL, Indian Oil Corp. and Hindustan Petroleum Corp. Ltd to expand their natural gas businesses. All three are promoting city gas distribution, setting up LNG terminals and marketing natural gas.
Besides, a Supreme Court ban on polluting fuels for industrial use has fuelled LNG demand. During April-October 2018, natural gas consumption rose 17.1%. During the same period, LNG imports increased 12.7% due to higher demand and lower domestic production.