The Hindu Business Line : LNG imports likely to be increased to meet demand

The Government is contemplating oil bonds of about Rs 11,500 crore for oil marketing companies, for losses suffered due to non-revision of prices of petroleum products.

New Delhi , Nov 18

TO supplement domestic supply of liquefied natural gas (LNG), India plans to increase imports of this fuel. Speaking at the Economic Editors Conference, the Petroleum Secretary, Mr S.C. Tripathi, said, "In June 2005, sale purchase agreement for import of 5 million metric tonnes per annum (mmtpa) of LNG from Iran was signed between GAIL-IOC-BPCL and National Iranian Gas Export Co Ltd (NIGEC) and imports are likely to start from fourth quarter (October-December) of 2009."

This was in addition to the 5 mmtpa of LNG that India sources from Qatar, he said. On the additional 2.5 mmtpa LNG from Qatar, the Secretary said negotiations were on and the LNG supply was expected in 2008-09. The additional LNG from Qatar would be received at the Petronet LNG Ltd (PLL) terminal.

PLL has constructed a 5-mmtpa capacity LNG terminal at Dahej in Gujarat where commercial supplies commenced in March 2004, Mr Tripathi said, adding that the terminal capacity was being expanded to 10 mmtpa.

Trans-national pipeline: Mr Tripathi said that proposed gas imports from Myanmar through the Myanmar-Bangladesh-India natural gas pipeline was being pursued `vigorously' and expected to be finalised shortly. He also said that other options for import of natural gas from Myanmar were being explored. India is considering bringing Myanmar gas via the North East, he said.

Regarding the Iran-Pakistan-India gas pipeline, Mr Tripathi said talks were on with all the countries and two rounds of discussion had taken place with Pakistan. India has already appointed a financial consultant and is finalising legal and technical consultants for the project, he said. "The Pakistani side has informed that they will shortly be appointing their financial consultants," he added.

Petroleum pricing: About the pricing of LPG, kerosene, petrol and diesel, the Secretary said that the Government was in favour of equitable burden sharing between all the three stakeholders — the Government, oil companies and the consumer. He, however, reiterated that the Government always looked at a mechanism where the consumer would bear the minimum burden of spiralling international crude prices.

The public sector downstream companies have reported loss in the first half of the current fiscal, the Secretary said, adding that in April-June 2005 IOC, HPCL, BPCL and IBP reported a loss of Rs 1,227.39 crore. While price of petrol and diesel have been raised by Rs 3 per litre and Rs 2 per litre respectively in September, the increase would not be sufficient to improve the balance sheets adequately in the second quarter. It has been decided that the upstream oil companies would contribute Rs 3,220 crore for the second quarter (July-September 2005) towards under-recoveries suffered in marketing sensitive petroleum products, he said.

The Government is also contemplating oil bonds of about Rs 11,500 crore for oil marketing companies, for losses suffered due to non-revision of prices of petroleum products.

Regulatory Board Bill: The Secretary said that the Group of Ministers had already considered the draft bill and given its nod. The Ministry hoped to take it to the Cabinet sometime next week, he said.

Exploration: India plans to offer blocks under New Exploration Licensing Policy (NELP) VI in the first quarter of 2006. The Government had signed product-sharing contracts (PSCs) for 18 exploration blocks under the fifth round of NELP. Two more contracts were likely to be signed this month under NELP V, he said.

As regards disclosure norms for oil companies, the Secretary said norms already exist under the PSCs, which the capital market regulator had been informed about. The DGH was working out similar norms for non-PSC contracts.

LPG shortage: The cooking gas (LPG) shortage gripping the country would be overcome within the next 15 days, Mr Tripathi said.

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