Petronet-LNG wants Kochi port deal by 15th December

Vol 10, PW 16 (30 Nov 06) Midstream & Downstream

Petronet-LNG is moving fast to sign a concession agreement with port authorities at Kochi, site of its proposed 2.5m t/y LNG terminal.

PETROWATCH learns both sides made good progress during talks about the draft agreement in Kochi on 12th, 13th and 14th November. We covered almost 50% of the concession agreement, a source tells us.

By 15th December we want to sign the concession agreement. Both sides met again on 22nd and 23rd November.

During the first round of meetings in mid-November, Petronet-LNG also met senior Gorgon LNG executives from ExxonMobil and Chevron to continue talks on the supply of 2.5m t/y LNG from the Australian project to Kochi. We finished discussions on the operative part of the Gas Sale Purchase Agreement, we learn.

The price and other commercial terms as well as the legal terms have been finalised. Next month Petronet-LNG receives the second draft of the operative part from Gorgon.

Lawyers will then take over and check the details, to see if what was agreed in the discussions has been included correctly. Both sides will meet again in January.

Gorgon has agreed to sell LNG to Kochi for 25 years. Theyve agreed to sell 25% of whatever LNG theyll produce but not less than 2.5m t/y, we hear.

Weve got a very good deal. In Australia meanwhile, hopes are alive that a convener appointed to hear arguments and counter-arguments over the projects impact on a rare species of flatback turtle, which has nesting beaches near the proposed LNG facility on Barrow Island, will deliver a positive verdict next month (December).

Most people believe he will say the project can move forward but on certain conditions, we hear. Everyone is waiting to see the additional cost that this entails.

If its a small amount it wont matter but if its $1bn extra the consortium might think again. Gorgon promoters hope to take a Final Investment Decision by 31st March next year.