Canadian gas for Gujarat fertiliser plants?

Vol 16, PW 25 (11 Jul 13) Midstream & Downstream

Atanu Chakraborty, widely tipped to replace Tapan Ray as the new managing director of GSPC, has been shopping in Canada, on the hunt for oil and gas assets.

Chakraborty is MD of Gujarat State Fertilisers & Chemicals (GSFC) and on June 29 submitted a report detailing his trip at the head of a GSFC delegation on May 24 and 25. GSFC, says the report, wants to ‘farm-in’ to Canadian gasfields to secure long-term supplies for its plants back home.

Chakraborty's report explains how GSFC met Calgary-based explorers Birchcliff Energy and Crew Energy for talks about picking up stakes at their gasfields in Alberta. Birchcliff produces around 4000 b/d and 131m cf/d (3.8m cm/d) gas from the Peace River Arch area in Alberta, while Crew produces 5300 b/d conventional oil, 5600 b/d heavy oil, and 76.9m cf/d of gas (2.2m cm/d) from its assets in Alberta, British Columbia and Saskatchewan.

GSFC wants to convert gas from Birchcliff and Crew into LNG at a liquefaction facility and ship it to India under long-term deals at a price of around $4/mmbtu. "We are looking at a burner tip price in Gujarat of not more than $7/mmbtu," we hear.

In Gujarat GSFC badly needs gas for the expansion of its fertiliser plants at Dahej and Sikka, the site of a 5m t/y LNG terminal proposed by Gujarat State Petronet, a project unlikely ever to see the light of day. So desperate is GSFC for gas that it has volunteered itself as anchor customer at Sikka with a 30% stake in the terminal.