Any takers for a 'co-operative' LNG terminal?

Vol 17, PW 4 (19 Sep 13) Midstream & Downstream

Gujarat is home to milk, fertiliser and banking cooperatives.

Now former Petronet-LNG managing director Prosad Dasgupta suggests the state's cooperative movement should add another feather to its cap by setting up a LNG terminal. Dasgupta, who was Petronet-LNG managing director and CEO from 2005 to 2010, suggests gas users should come together to set up a LNG terminal.

“The basic idea is to spread the risks associated with a LNG terminal among several entities," Dasgupta tells PETROWATCH. "Unlike a consortium where there are only two or three companies sharing equity, here the base of stakeholders can be wide.

” Dasgupta suggests 1000 gas-using factories in Gujarat and other states could contribute Rs5cr ($776,000) each to set up a Rs5000cr ($776m) fund to construct a 5m t/y LNG terminal. He says companies could even contribute less as it is only necessary to tie up 30% equity in an LNG terminal: the rest funded by debt.

Alabhai Parmar, one of the founders of India's only CGD cooperative Charotar Gas, believes Dasgupta is talking sense. “A cooperative terminal will not only work but will work successfully,” Parmar claims.

"Gas consumption is never going to go down." He adds the idea is being considered seriously by ceramics factories at Morbi in west Gujarat and at Himatnagar in north Gujarat.

Parmar's argument is simple. He believes that if cooperative Charotar can succeed supplying gas to 15 villages in Gujarat's Anand district then a cooperative LNG terminal is not as wishful as it may seem.