HPCL in talks with Petronet-LNG for Gangavaram

Vol 17, PW 20 (22 May 14) Midstream & Downstream

Until now you've only heard of Hindustan Petroleum's plans to set up a LNG terminal at Chhara in Gujarat on India's west coast.

But on the east coast HPCL is also thinking of taking a stake at Petronet-LNG's proposed 5m t/y Gangavaram LNG terminal in Andhra Pradesh or setting up its own Floating Storage and Regasification Unit (FSRU) at Vizag. Either will enable HPCL to feed its 8.3m t/y Vizag refinery.

“HPCL is in talks with us,” confirms Petronet-LNG. “It can easily become our anchor customer.

” On offer from Petronet-LNG is between 11% and 15% in the Rs5000cr ($853m) Gangavaram project. But HPCL doesn't want to wait for Gangavaram to be constructed by end-2018 so it's also considering a FSRU.

"A study has been completed on a Vizag FSRU,” confirms HPCL. “But we haven’t finalised anything.

” HPCL believes a FSRU at Vizag could easily source LNG from the Singapore LNG terminal, which began operations last year. At current production levels the Vizag refinery could consume 1m to 1.5m t/y of LNG, increasing to 3m t/y if a planned expansion of the refinery to 15m t/y goes ahead.

An industry source says even with high R-LNG prices it makes commercial sense to replace liquid fuels with gas to generate hydrogen. As HPCL will use the R-LNG itself at Vizag it won't have trouble laying pipelines or getting other clearances.