Mitsui approved for Mundra LNG stake

Vol 13, PW 19 (11 Mar 10) Midstream & Downstream
     

Japanese trading giant Mitsui has emerged the favourite to take a 25% stake in the proposed Mundra LNG terminal promoted by GSPC.

PETROWATCH learns GSPC (50%) has selected Mitsui over British Gas, Gazprom, RasGas and IndianOil to be its third partner in the project after Adani Energy (25%). “In the last week of February, GSPC secured the green light from the Gujarat government to proceed with Mitsui as the third partner,â€‌ confirm GSPC sources.

“Talks with Mitsui can now begin.â€‌ These sources add that a 10-member team from Mitsui visited GSPC headquarters at Gandhinagar on Friday March 5 for preliminary talks ahead of a possible Memorandum of Understanding (MoU).

GSPC will be hoping that Mitsui can commit long term LNG to the proposed 5m t/y terminal, but as of now it is unclear how much. According to GSPC, Mitsui outshone its competitors in terms of sheer persistence, by hard lobbying at GSPC and with Gujarat government officials in Gandhinagar.

Mitsui’s flexible approach also set it apart from its main rival BG, which GSPC sources describe as being “orthodox and conservativeâ€‌ in its outlook. “BG also seemed more interested in securing the contract to supply 2m t/y LNG to Mundra than,â€‌ we hear, “in picking up a 25% stake.

â€‌ BG was the first company to have made a written proposal committing long term LNG supplies to the Mundra terminal and GSPC had earlier stressed the importance of finding a partner who could assure such supplies. Quite possibly GSPC was attracted to Mitsui because of its 12.5% stake in the Sakhalin Energy Investment Company, which operates the Sakhalin-II project in Russia with a LNG production capacity of 9.6m t/y.

“For years Mitsui has been a big name in trading spot and short term LNG cargoes,â€‌ we are told. “But with Sakhalin-II it has established a position as a long term supplier.

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