Petronet-LNG wants DFR for third LNG terminal

Vol 15, PW 10 (17 Nov 11) Midstream & Downstream

Hindustan Petroleum isn’t the only company getting excited about growing demand for LNG imports in India.

Petronet-LNG has set November 28 as the bid submission deadline in its tender to hire a consultant who can prepare a Detailed Feasibility Report (DFR) for a proposed 5m t/y east coast LNG terminal, its third after Dahej and Kochi. Companies pre-qualified to bid for this contract are Sofregaz, Foster Wheeler, Technip, Whessoe, Engineers India, Tractebel, Black & Veatch and Worley Parsons.

Once it receives technical bids, Petronet-LNG could take up to 20 days to evaluate them before awarding the contract by the end of December. It wants the selected consultant to prepare the DFR within 16 weeks of the date of award, and to carry out an environmental impact assessment study.

“Only after the DFR will Petronet-LNG directors consider giving final approval for the new LNG terminal,” says a senior company source. “We have identified four possible locations for the terminal.

Our in-house team is studying gas demand around each site. But we will finalise the exact location before we award the DFR contract.

” Sites under consideration include the southern Indian ports of Kakinada, Gangavaram and Krishnapatnam, all located in Andhra Pradesh; and Dhamra Port which lies further north along the Orissa coast. According to industry estimates, unmet gas demand on India’s east coast stands at a staggering 40m cm/d.

“We don’t expect much R-LNG demand from the power sector as it is extremely ‘price-sensitive’,” adds Petronet-LNG. “Instead we will target east coast refineries and petrochemical companies (like the Vizag refineries operated by HPCL or IndianOil’s upcoming Paradip refinery in Orissa).

” Petronet-LNG is also targeting local factories using liquid fuels like naphtha, fuel oil or diesel as fuel to switch to using R-LNG instead.