Lots of willing customers for R-LNG from Ennore

Vol 22, PW 11 (21 Mar 19) Midstream & Downstream

IndianOil is in talks with Southern Petrochemicals Industries Corporation (SPIC) for a 900,000 t/y long-term R-LNG contract as it prepares to begin first commercial supplies from its just-commissioned Ennore LNG terminal this month (March).

An IOC source tells us petrochemicals and fertiliser producer SPIC is interested in R-LNG for its factory at Tuticorin port 625-km from the 5m t/y terminal inaugurated by Narendra Modi on March 6 (2019). Already a success story, India's first east coast LNG terminal received a 110,000 cubic metre commissioning cargo from Qatar through Swiss trader Gunvor on February 26 for which IOC reportedly paid around $9.50/mmbtu "delivered ex-ship.

’ "Actual cooling (commissioning) of the terminal facilities and pipeline will take a little over two weeks," says IOC. First R-LNG supplies will be to IOC-subsidiary Chennai Petroleum’s Manali refinery which will receive 1.8m t/y; state-owned Madras Fertilizers which will take 1.2m t/y and private company Tamilnadu Petroproducts which will take 100,000 t/y.

These three anchor customers have signed 20-year contracts and will be supplied R-LNG through a 22.65-km pipeline from Ennore to Manali, part of IOC's under-construction 1244-km pipeline to Tuticorin. By June (2019) IOC is aiming to sign contracts for another 1.5m t/y R-LNG to steel, automobile and other factories in the Sriperumbudur industrial area, 80-km away, including to French glass manufacturer Saint Gobain, which wants 46,000 cm/d.

These are likely to be short-term contracts lasting one to three years.