Ril-bp To Kick Start Sourcing And Marketing Of Natural Gas

India Gas Solution, a 50:50 joint venture between Mukesh Ambani-led Reliance Industries

Limited (RIL) and London based energy company BP Plc, has set rolling its plans to source and market natural gas in India. As a part of this objective, the joint venture partners are eyeing plans to set up three Liquefied Natural Gas (LNG) terminals in the eastern and western sea board of India.

Reliance Industries and BP signed a long-term deal as a part of which BP will stake 30 per cent share in 21 of 23 oil and gas production sharing contracts (PSC) that RIL operates in India, including its much acclaimed KG - D6 block off the east coast of Andhra Pradesh. Also a part of this deal is the 50:50 joint ventures between the two energy giants for global sourcing and distribution of gas in India. The joint venture company will also look to develop infrastructure to accelerate transportation and marketing of natural gas within the country.

In the first phase of developing sourcing and marketing channels, RIL and BP plan toset up at three LNG terminals, each one with a capacity of at least 5 million tonne per annum. Presently, India Gas Sourcing venture is conducting feasibility studies to set up two LNG terminals on the eastern sea coast and one on the western sea coast. Since western sea coast is already swamped with many similar outposts, the joint venture company will focus largely on establishing terminals on eastern sea board. However, a concrete plan is yet to be materialized and presented to the government for approval regarding the location and number of terminals for establishment. Locations like Dhamra, Mangalore, Kakinada and Paradip are top on the preference list for development; however a final call on locations will depend on the availability of infrastructure for distribution and locations that are ideal for BP to source gas to India.

Industry estimates suggest that natural gas demand is set to rise to around 410 mmscmd by 2019-20 as compared to actual consumption of around 177 mmscmd in 2010-11. With increasing demand for more natural gas, additional LNG terminals will be sought to fulfill the surging demand.

by: Chintan Shah

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