Sonatrach ignores IOC request for LNG

Vol 16, PW 10 (29 Nov 12) Midstream & Downstream

IndianOil wants oil ministry help to secure 3m t/y of LNG from Algeria’s state-owned Sonatrach for its proposed 5m t/y LNG terminal at Ennore in Tamil Nadu.

IOC director business development AMK Sinha met ministry joint secretary (international co-operation) Sunjay Sudhir on November 8 to suggest it’s time for inter-governmental negotiations to kick-start the process. “IOC wants 3m t/y of LNG from Algeria over 10 years,” says a government source.

“Short-term and spot LNG is also needed at Dahej and Kochi.” IOC wrote to Sonatrach vice president (commerce) Yamina Hamdi in July and also approached the Algerian embassy in Delhi.

But neither the embassy nor Sonatrach seem the least bit interested. “That’s why IOC needs government help,” we learn.

IOC is also ready to take a stake in the under-construction 4.5m t/y LNG project at Skikda in northeastern Algeria, slated to come on stream next year. Another idea is to set up its own petrochemical project in the North African former French colony in return for competitively priced and steady gas supplies.

Alternatively it might even consider securing equity in an established Algerian project. “We want Algeria to tell us about projects at a conceptual stage or where equity is on offer,” adds IOC.

Algeria is certainly an attractive destination, with Africa’s fourth-largest proven oil reserves of 12.20bn barrels. Algeria also has the 10th largest proven gas reserves in the world and the second largest in Africa after Nigeria at 4504bn cubic metres or 159-tcf.

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