Petronet, promoted by four Indian state-owned firms—GAIL (India) Ltd, Bharat Petroleum Corp. Ltd, Indian Oil Corp. Ltd and Oil and Natural Gas Corp. Ltd—is exploring a similar opportunity in the Maldives. Photo: Bloomberg
Petronet, promoted by four Indian state-owned firms—GAIL (India) Ltd, Bharat Petroleum Corp. Ltd, Indian Oil Corp. Ltd and Oil and Natural Gas Corp. Ltd—is exploring a similar opportunity in the Maldives. Photo: Bloomberg

LNG diplomacy: India plans to build terminals in 4 nations

The ambitious move to supply clean fuel comes in the backdrop of increasing Chinese influence in some of these countries that New Delhi has traditionally considered within its sphere of influence

New Delhi: In what may boost India’s role in creating a new energy security architecture for its neighbours, state-run Petronet LNG Ltd (PLL) is planning to set up liquefied natural gas (LNG) terminals in Myanmar, Bangladesh, Sri Lanka and Mauritius at an investment of around $2.5 billion.

Also, Petronet, promoted by four Indian state-owned firms—GAIL (India) Ltd, Bharat Petroleum Corp. Ltd, Indian Oil Corp. Ltd and Oil and Natural Gas Corp. Ltd—is exploring a similar opportunity in the Maldives.

These terminals, totalling around 15 million tonnes per annum (mtpa), will reconvert natural gas shipped in a liquid form into gas and would help India exert economic and strategic influence in the region.

The ambitious move to supply clean fuel comes in the backdrop of increasing Chinese influence in some of these countries that New Delhi has traditionally considered within its sphere of influence.

Prabhat Singh, managing director and chief executive of Petronet, told Mint that the firm was looking at setting up these terminals in Bangladesh (7.5 mtpa), Sri Lanka (2.6 mtpa), Myanmar (3.5 mtpa) and Mauritius (1 mtpa).

“Petronet has been till now actually focusing inwards within the domestic market. Now, the time has come to make global forays starting with the neighbouring countries first," Singh said.

The firm set up India’s first LNG terminal at Dahej (15 mtpa) in Gujarat, and another at Kochi (5 mtpa) in Kerala.

Of the four such overseas terminals planned, the ones with Sri Lanka and Bangladesh have already gained traction. A memorandum of understanding (MoU) and heads of understanding has been inked between Petronet and Bangladesh Oil, Gas and Mineral Corp., (Petrobangla) for the 7.5 mtpa terminal. An MoU has been inked with the Sri Lankan Government, with the island nation also issuing a Letter of Intent for the terminal to come up on its western coast.

While presentations have been made to the Myanmar government, PLL is among the firms shortlisted to set up the LNG terminal in Mauritius. Earlier this month, Petronet had also announced its plans to partner with state-run ONGC Videsh Ltd (OVL) to pick up a stake in an upcoming exploration and LNG project in Qatar.

Fostering cross-border energy trade is an important part of Prime Minister Narendra Modi’s South Asia-focused neighbourhood-first policy, with India also pursuing long-term deals with its neighbours for supplying domestic cooking gas and other petroleum products.

“Since, this is the golden age of gas, for sure the abundance of gas supply and the low cost is going to dominate at least for the next two decades. So, this is a great time to really proliferate one’s business and to grow in terms of creating infrastructure which is the need of the hour today," Singh added.

Singh’s comments come at a time when India, the world’s fourth-largest LNG importer, has been trying to leverage the glut in global LNG supplies. Also, apart from the US, new natural gas suppliers such as Mozambique, Tanzania, Egypt, Israel, Canada and Cyprus are expected to enter the LNG market, helping consumers get better prices.

Queries emailed to spokespersons for India’s ministries of external affairs and petroleum and natural gas on Tuesday remained unanswered.

India has been setting up the building blocks of this new energy partnership with its neighbours. Apart from building power projects in Bhutan, Nepal and Bangladesh, India already has power grid links with Bhutan, Nepal, Bangladesh and Myanmar, and plans to develop power transmission links with Sri Lanka. Also, power-starved Bangladesh wants to buy at least 2,000 megawatts (MW) of electricity from large solar parks being set up in Gujarat and Rajasthan Mint reported on 16 April.

India is also championing for a South Asian Association for Regional Cooperation (Saarc) Energy Initiative to create sub-regional hydrocarbon infrastructure such as gas networks. This is on the lines of the Saarc electricity grid which envisages meeting electricity demand in the region. Saarc groups India, Pakistan, Nepal, Bhutan, Bangladesh, Sri Lanka, Afghanistan and the Maldives.

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