Financial Daily from THE HINDU group of publications
Friday, Mar 05, 2004
Financial Daily from THE HINDU group of publications Friday, Mar 05, 2004 |
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Alliances & Joint Ventures Industry & Economy - Petroleum IOC ties up LNG sale with Essar Steel Our Bureau
New Delhi , March 4 INDIAN Oil Corporation (IOC), a co-promoter of Petronet LNG Ltd., has tied up its share of LNG sale through strategic Gas Sales Agreements (GSA) with key customers. The GSA for the last tranche of supplies was signed recently with Essar Steel Ltd. Commercial supplies to customers are expected to commence from April 2004 onwards, according to an official release. Tying up LNG supplies with end-consumers is critical to the viability of Petronet's LNG venture and IOC's tie-ups are a step in this direction. As co-promoter Petronet LNG Ltd, IOC is entitled to market 2.52 million standard cubic metres per day (mmscmd) gas till December 2004. The gas allocation is expected to be progressively enhanced to 5.26 mmscmd from January 2005 onwards. For sale of the additional quantities, IOC has already commenced discussions with prospective customers covering the states of Delhi, Haryana, UP, Rajasthan, Madhya Pradesh and Gujarat. Major customers who have signed up with IOC for gas supplies include Gujarat State Petroleum Corporation, Haryana Sheet Glass, Hindustan National Glass Industries Limited and Surya Roshni Limited and now Essar Steel. The agreements are valid for a five-year term. Essar Steel is the only gas-based steel plant in the country located at Hazira in Gujarat. To meet the steel major's expansion plans in the future, Essar Steel has also proposed to source additional gas supplies from IOC, as and when required.
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