India’s Petronet to invest $2.6 billion for local expansion over 5 years
India’s top gas importer Petronet LNG will invest $2.6 billion over five years to expand local infrastructure as investing in overseas projects is ‘not lucrative’ in the current liquefied natural gas (LNG) surplus market, its head of finance said.
“Right now, investment in LNG terminals anywhere outside India is not very lucrative because LNG is available at very low prices it is only recently that prices have increased… availability of LNG is plenty,” Vinod K Mishra said during an analyst call after the company reported its March quarter earnings.
He said at the moment, there was no financial incentive to invest in overseas projects to lock in LNG supplies.
The company was earlier planning to invest in projects in Sri Lanka, Bangladesh, Qatar and Tellurian’s Driftwood LNG project.
India wants to raise the share of gas in its energy mix to 15% by 2030 from 6.2% and is raising its local output.
Mishra said higher domestic supplies could hit costly spot LNG imports in the short term, but would not impact imports in the long term as India’s gas consumption is expected to jump.
Petronet plans to invest 66.9 billion rupees to expand its 17.5-million-tonne per annum (mtpa) Dahej terminal in the West coast to 22.5 mtpa, build a new terminal in the east coast and building new jetty and LNG tanks at Dahej and Kochi, he said.
Mishra said in the first phase, the Dahej terminal will be expanded to 20 mtpa by mid-2023, while a new 5-mtpa Gopalpur terminal in the east coast is expected to be ready by 2025.
Petronet, which was previously planning to sell gas to fuel station owners, will invest 80 billion rupees to set up its own 1000 LNG fuel stations, he said. It will invest 40 billion rupees to set up 100 compressed bio gas generation plants over 3 years.
Earlier in the day, Chief Executive A.K. Singh said the company was talking to various sellers, including Qatar, to buy gas at reasonable rates for the price-sensitive Indian market.
Source: Reuters (Reporting by Nidhi Verma; Editing by Bernadette Baum)