Enron on target for first LNG supplies to India

Vol 3, PW 21 (10 Nov 99) Midstream & Downstream

Will Enron be the first company to land LNG into India It clearly appears so, but whether it has a market for any surplus, or the means to transport it to the customer is another matter.

Enron is clearly ahead of the competition on the key questions of constructing an LNG facility, securing a source of supply and shipping it to India. By all accounts construction of Enrons LNG facility at Dabhol is 25% complete.

The company claims first supplies will land there by the end of 2001, the earliest date announced by anyone so far. Petronet-LNG reckons its LNG will land in India by July 2003 at the earliest.

Enrons LNG complex stands alongside a 1,444-MW captive power plant (Phase II) promoted by the Dabhol Power Company. This will run entirely on 2.2m t/y of regassified LNG from Dabhol, leaving a surplus 2.5m t/y that still needs to find a home, even though some will be swallowed by Phase I.

Construction of Phase II is also progressing on schedule. Unlike British Gas or Total, Enron has firmed up supplies of LNG with hard agreements.

Oman LNG is supplying 1.6m tonnes a year (t/y), Abudhabi Gas is supplying 0.5m t/y and in July this year Enron subsidiary Metropolitan Gas signed a Confirmation of Intent (COI) for the supply of 2.6m t/y from Malaysia LNG TIGA (60% owned by Petronas). On the issue of shipment to India, Enron is ahead of Petronet-LNG, which struggles to find a suitable Free On Board (FOB) solution to get its Qatari gas to India.

In December 1998, Enron (20%) signed a $200m joint venture with Mitsui (70%), Shipping Corporation of India (10%) for the construction of a 135,000 cubic metre LNG tanker for Dabhol. The tanker is presently under construction in a Japanese shipyard.

Only in one area is Enron behind: marketing. Total has a strategic alliance with Gas Authority of India, while British Gas is with National Thermal Power Corporation (NTPC).

For the moment, Enron has no one but itself.