ONGC can still acquire 5% in RasGas if it wants

Vol 7, PW 25 (10 Mar 04) Midstream & Downstream

Disappointment at its exclusion from the Petronet-LNG offer wont stop RasGas offering ONGC one of the Petronet-LNG promoters a reciprocal 5% stake in the Exxon and Qatar Petroleum joint venture.

It is part of the contract between both sides that Petronet-LNG will get 5% equity stake in RasGas, learns PETROWATCH. Its different with RasGas taking a stake in Petronet-LNG because here only Letters of Intent were exchanged.

Nominated by Petronet-LNG because of its strong balance sheet, ONGC is yet to begin due diligence of RasGas. ONGC hasnt indicated when it plans to begin due diligence, reveals a source.

In Qatar, meanwhile, RasGas 4.8m t/y Train-III natural gas liquefaction plant will be formally inaugurated on 23rd March on the sidelines of the 14th LNG Conference scheduled in Doha from 21st to 24th March. Train-III was constructed at a cost of about $1bn and is fully dedicated to Dahej, which received its first consignment of LNG on 29th January, a month after the Petronet-LNG terminal was commissioned.

As scheduled, the first stream of regassified LNG crossed the GAIL metering station within the Petronet-LNG terminal complex at Dahej and into the HBJ on 29th February. The next day on 1st March, LNG tanker Disha berthed at Dahej with her second consignment of 136,000 tonnes LNG.

The second consignment was completely discharged on 3rd March, we are told. Disha will bring in the third consignment of LNG from RasGas in the last two weeks of March.

Under the gas contract between Petronet-LNG and its offtakers, commercial sales will begin from 1st April. Regassified LNG entering the HBJ before then is being used to commission the pipeline.

We will be invoicing this regassified LNG to GAIL but under the agreement all quantities taken prior to 1st April will be on a best effort basis and at a price to be mutually agreed. We understand the price will be lower than the regassified LNG contracted sale price of $3.23 per mmbtu but higher than the price that ONGC sells domestic gas to GAIL.