Tokyo Gas prepares DFR for Mangalore LNG

Vol 16, PW 26 (25 Jul 13) Midstream & Downstream

Tokyo Gas Engineering (TGE) is preparing a DFR for ONGC’s proposed LNG re-gasification terminal at Mangalore amid growing doubts over the project’s viability.

“I have been hearing about this project since 2005,” said an EPC contractor, laughing at the mention. “It seems like a lot of hot air!” Others are less pessimistic about the proposed 5m t/y project at Mangalore Port that ONGC is leading with BPCL and Japanese trader Mitsui.

TGE’s report, expected in December this year, will explore the possibility of building both a 5m t/y LNG terminal onland and a 3.5m t/y FSRU. TGE was selected to prepare the DFR in May 2013, shortly after ONGC, BPCL and Mitsui signed a MoU with the New Mangalore Port Trust on March 18, 2013.

“Mitsui will have recommended TGE,” guesses a source. “They must be more comfortable dealing with another Japanese company.

” Consortium sources add that a decision to build a land-based terminal or to bring in a FSRU will be taken only after the DFR is complete. Mitsui and BPCL are excited about potential gas demand in and around Mangalore.

“Selling gas in Mangalore will not be a problem,” said a source, confidently. “Only a few pipelines are needed to evacuate the gas.

” Some in ONGC however are sceptical. “The DFR might throw up some good numbers showing it’s commercially viable,” we hear.

“But pushing the proposal through the board of directors won’t be easy. Independent directors and the government will need to be persuaded that the project is viable.