Petronet looking to buy more LNG to sate increasing hunger

Petronet LNG, India's biggest gas importer, has a huge appetite for gas and is still looking to buy a further nine million tonnes of liquefied natural gas a year by 2012, amid a planned expansion of its LNG import terminals, a top company official said yesterday.

To secure supplies, Petronet is in talks to buy the entire output of Canadian Interoil's proposed LNG project in Papua New Guinea, while it is also looking to buy more LNG supplies from the ExxonMobil-led LNG project also in Papua New Guinea, besides Chevron's Gorgon LNG project in Australia.

"We are looking to buy the entire output in the first phase of InterOil's project. That is the strength we bring on the table, because then InterOil will not have to go around the world to find customers," Prosad Dasgupta, Managing Director of Petronet, said in an interview at the LNG World conference.

Apart from discussions to buy all of InterOil's LNG output, Dasgupta said the firm was also in talks with InterOil and other firms in Papua New Guinea to acquire stakes in gas fields.

InterOil, which is in the process of selling a stake of up to 35 per cent in its LNG project in Papua New Guinea, said on Monday it expected the sale to be completed by year-end.

InterOil's LNG project is targeting a production capacity of between 3.5 million and five million tonnes a year, with first LNG shipments in 2014.

Dasgupta said the company was in talks with Exxon to buy gas from the first phase of the Papua New Guinea project, commonly known as PNG LNG. But stiff competition for the gas from other North Asian buyers had made the terms unattractive to Petronet.

"We're now in talks to buy gas from the second (production) train," Dasgupta said, adding that the unit had a capacity of 3.3 million tonnes per annum.

Despite its big appetite for gas, Petronet is less keen to buy LNG from other Australian LNG projects that plan to use coal seam gas as a feedstock, Dasgupta said, adding that higher freight rates and more expensive compression costs made such projects less attractive.

Petronet, which is ramping up the capacity of its two LNG terminals to 17.5 mtpa from the current 10 mtpa, has contracted 7.5 mtpa from Qatar's Rasgas project and 1.5 mtpa from Exxon for the Gorgon project.

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