ONGC to sign pact for Mangalore LNG terminal on Mar 18
New Delhi: State-owned Oil & Natural Gas Corp (ONGC) will on Monday sign an agreement to conduct feasibility of setting up USD 500-750 million liquid gas (LNG) import terminal at Mangalore.
The Memorandum of Understanding (MoU) will be signed by ONGC, Bharat Petroleum Corp Ltd (BPCL), Mitsui of Japan and New Mangalore Port Trust, official sources said.
The terminal will have an initial capacity of 2-3 million tons, which can be expanded to 5 million tonnes later.
The New Mangalore Port Trust (NMPT) has given 'no objection' to carry out the feasibility studies, sources said adding an investment decision is expected by early 2014.
The ONGC-led consortium is eyeing 2018 for commissioning the terminal.
The MoU would be signed in presence of Oil Minister M Veerappa Moily, who has been behind revival of the Mangalore LNG terminal that had been put in cold storage by ONGC six years ago.
The first phase of the terminal will cost USD 500-750 million (Rs 2,800 to 4,200 crore) and is expected to be completed in 3-4 years.
In 2005, ONGC had plans to build a liquefied natural gas (LNG) terminal, which were then shelved in 2006 due to change in leadership. But now the company has again started looking actively at the plan of LNG import, with the clear idea that domestic gas availability at 160 million standard cubic metres per day in 2015-16 will be way short of demand of 290 mmscmd.
Also, Moily, who hails from Karnataka, is pushing the companies to set up the facility.
BPCL owns an equity stake in a giant gas field off Mozambique and it can ship its share of gas as LNG to Mangalore.
India has three operational LNG import facilities -- a 10 million tonne unit at Dahej in Gujarat operated by Petronet LNG Ltd; a 3.6 million tonne terminal of Shell-Total at Hazira in Gujarat, and a just commissioned 5 million tonne facility at Dahbol in Maharashtra.
Mangalore is home to a 15 million tonne refinery as also a proposed petrochemical plant, both of which could be anchor customer of the imported LNG.