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Pratim Ranjan Bose

Kolkata, March 29 Gujarat State Petroleum Corporation plans to start scouting for supplies to its proposed LNG terminal at Mundra by 2009-end.

According to sources, having relocated the project to a new site within the Adani Group-promoted Mundra Port and SEZ, GSPC is now in an advanced stage of finalising the front-end engineering and design (FEED) study.

“The detailed feasibility report is finalised and discussions on FEED are over and the contract may be awarded soon after the general election,” a source said

It may be mentioned that the company was near awarding the contract to Tractabel of Belgium in December 2008 when the project was partially relocated, reportedly to reduce the expenditure on land filling and reclamation, as well as to accommodate the enhanced capacity of 7.5 million tonnes.

“In all fairness we are expecting to start bidding for the EPC (engineering procurement and construction) contract and start scouting for LNG supply contracts by October-December 2009,” the source said.

“Though we had some early discussions with several LNG suppliers in the world, unless we take some definitive steps towards implementing the project, we cannot firm up any deal,” he said.

Sources say that the current meltdown in energy demand may offer GSPC enough opportunity to strike long-term supply deals at low costs.

“The trend in global gas market suggests that the low LNG prices are going stay for sometime and we are confident to take advantage of the situation to ensure enough supplies,” he said.

According to sources, the April cargo of spot LNG at Shell Hazira terminal is priced at $4.7 an mmBtu (ex-ship). After re-gasification spot LNG will be available at around $5.7 an mmBtu, which is comparable to price of natural gas sourced in Gujarat from the Panna-Mukta-Tapti joint venture and Reliance’s D6 field.

GSPC previously said they were aiming to secure a mix of term contracts and spot deliveries in the terminal slated to be commissioned in 2012.

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