Qatar and Oman also likely sources for Dabhol

Vol 9, PW 6 (30 Jun 05) Midstream & Downstream
     

India has also been talking to Petronas and the North West Shelf consortium as potential LNG suppliers to revive Dabhol.

But these talks failed, despite initial expectations that Petronas could supply 2m t/y and the North West Shelf 2.3m t/y after 2008-09. Costlier shipping rates for LNG from sources east of Dabhol than from sources to the west is the main reason for this.

There will be nothing from Australia or Malaysia, an oil ministry confirms. If Petronas could supply LNG from Egypt or Iran, matters would be different.

GAIL, with ministry support, is now focussing attention on the Middle East. Next in line as the most likely source after ADGAS is Qatar, we are told.

Then comes Oman. Thats all we have for now.

Hopes are alive that Indias long-standing ties with Qatar the only long-term LNG supplier to India would yield some LNG for Dabhol. Our teams have visited Qatar many times, we learn.

Diplomatic efforts are also underway. India knows that Qatars LNG production capacity will be 77m t/y by 2012 and that SPAs have been signed for almost all of this.

Even if we can get 1% of this capacity to Dabhol it would be good. The oil ministry feels that Qatar could spare at least 0.7m t/y of its total planned production.

We believe they have the flexibility to set aside between 0.7m /y and 1m t/y out of the huge capacities theyve planned. India asked to receive LNG from Qatar for Dabhol during the visit of a Qatari government delegation in mid-June.

A GAIL team leaves for Qatar next month to pursue the talks. Oman was also one of the original LNG suppliers to Dabhol and the oil ministry hopes to receive LNG from here too.

Oman does not have any spare capacity and is happy selling LNG in the spot market, reveals a source. They see opportunities both in the eastern and western markets.

But India is not giving up. Oman will have to forego some of its spot deals if they agree to sell to us.

Will Oman be ready to do that We are offering a long-term contract. That should be an attraction.