Mumbai: Mumbai-based realtor Hiranandani Group-promoted H-Energy on Wednesday signed an agreement to buy liquefied natural gas (LNG) from Russian gas producer Novatek on a long-term contract as it looks to meeting energy needs of Asia's third-largest economy.
"Today, during the Eastern Economic Forum in Vladivostok, Pao Novatek and H-Energy Global Ltd, India, signed a memorandum of understanding," said H-Energy in a press statement.
The deal was announced hours after Prime Minister Narendra Modi arrived in Russia on Wednesday for summit talks with Russian President Vladimir Putin.
The MoU envisages co-operation in LNG supplies to India on a long-term basis, joint investment in LNG terminals of H-Energy and LNG projects of Novatek as well as setting up of a joint venture to market LNG and natural gas from Novateks’s portfolio to end-customers in India, Bangladesh and other markets.
"H-Energy and Novatek will endeavour to work together in the future LNG projects, midstream assets like LNG reloading and re-gasification terminals, cross-country pipelines, and small scale LNG and L-CNG infrastructure," the company added.
The company, however, did not disclose the quantity of gas signed.
H-Energy has built LNG terminals in Jaigarh (Maharashtra), Kakinada (Andhra Pradesh) and Haldia (in West Bengal).
While the Jaigarh LNG project is said to be completed by the end of the year, work on the other two projects will start in mid-2020.
H-Energy is laying two pipelines - one from Jaigarh to Mangalore and Kannai Chatta to Shrirampur - for transporting the imported fuel to consumers.
Petroleum minister Dharmendra Pradhan said on 26 August that the country’s oil and gas sector is seeing investments worth around ₹5 trillion in exploration, distribution, marketing, regasification, pipeline network laying.
The minister expects the domestic natural gas production to increase by around 20% from 32.87 billion cubic metres (bcm) in 2018-19 to 39.3 bcm by 2020-21. And with consumption increasing and new city gas distribution (CGD) networks coming on stream, investments are set to increase further.