The Hindu Business Line : Petronet LNG to sign deal with Aussie co

The deal
The SPA would be for supply of 2.5 million tonne of LNG per annum for 25 years.
A joint meeting of the suppliers and the buyers to discuss the draft SPA to be held on March 30.

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Kochi Jan. 29 Petronet LNG Ltd (PLL) is to sign a sale, purchase agreement (SPA) with the Australian firm Gorgan, a consortium of Chevron, Exxon Mobil and Shell, after June and the draft agreement is currently under finalisation, according to Mr P. Dasgupta, Chairman and Managing Director of PLL.

Speaking to media-persons here on Monday, Mr Dasgupta said that as a pre-requisite before signing the SPA, the contracts for erection, procurement and construction (EPC) and two 1,75,000 - tonne vessels would be finalised before March 31.

Construction

"Full scale construction of the LNG terminal at the Puthyvypeen island near here would commence in July 2007", he said. Three bidders have been short-listed for the EPC contract and from them one would be awarded the work before March 31, he said.

The cost of construction of the terminal would come to Rs 3,000 crore.

Similarly, the contract for the vessels costing $500 million would also be awarded by March-end.

Draft SPA

Only after finalising and awarding the EPC and vessel contracts, the SPA could be signed and the draft SPA is under evaluation and study by the parties concerned.

The SPA would be for supply of 2.5 million tonne of LNG per annum for 25 years. A joint meeting of the suppliers and the buyers to discuss the draft SPA would be held on March 30, he said.

On the purchase price of the LNG from Australia, Mr Dasgupta said that it could not be divulged now "due to various strategic reasons. Compromise has been made on both sides. But it is going to be a competitive price".

He said that a new pricing regime is going to be in force soon and the average price would come to $5.75 per mmbtu.

Kochi terminal

He said that the Kochi terminal with an initial capacity of 2.5 million tonne per annum (mtpa) could be commissioned between June and September 2010 with the provision to enhance the capacity to 5 mtpa. The marketing of the LNG would be done by BPCL, GAIL and IOC, he said.

The Kayamkulam thermal power plant of NTPC would absorb 2.1 mtpa and, hence, the capacity of the terminal would have to be raised to 5mtpa, which could be done at a short period at a minimum cost.

He said that there was no need for apprehensions now as the work has commenced on Monday with the "Bhoomi pooja" and ground-breaking ceremony at the site.

Thirty two hectares of land at the Puthuvypeen island at the entrance of the Kochi harbour has been taken over by PLL from the Cochin Port Trust.

Those participated included Dr Jacob Thomas, CEO, PLL Kochi Terminal Project, and Mr N. Ramachandran, CPT, Chairman.