IndianOil prepares for thrill of buying LNG
There comes a time when training must stop.
For IndianOil that time has come. India’s largest state-owned refiner wants to import LNG on its own, without Petronet-LNG’s support, and wants six tanker berthing slots at Dahej in 2013.
“IOC has asked for the first slot in January,” we hear. “But its first cargo is unlikely before April or May; the rest should come by end-2013.
” IOC, he explains, is practising for its own upcoming 5m t/y Ennore LNG terminal in Tamil Nadu. “IOC wants to get a feel for the LNG market,” adds our source.
“Eventually, it will move to short-term cargoes and finally to long-term cargoes at Ennore (slated for completion in 2016).” At Dahej IOC will import only standard-sized 138,000-cubic metre cargoes, equivalent to 80m cubic metres of R-LNG.
And with it the excitement of striking spot deals, with cargoes often on the high seas. But it must still rely on Petronet-LNG to berth tankers at Dahej, and to store and regasify LNG.
Once familiar with LNG trading, IOC plans to practise with short-term contracts for three or four years from 2014. Last month (October) IOC signed a MoU with South Korea’s state-owned KOGAS to cooperate on LNG sourcing, gas infrastructure and E&P.
Earlier this year, IOC received EoIs from RasGas, ExxonMobil, Chevron, BG, Gazprom and others. “We are preparing a draft gas Master Sales Purchase Agreement (MSPA),” confirms IOC, “and plan to begin negotiating in December.
” IOC will then issue limited tenders to source LNG from short-listed suppliers.
