Swap arrangement for Chhara R-LNG planned
Hindustan Petroleum is talking to GAIL about a gas swap arrangement before commissioning the much-delayed Chhara LNG terminal.
"We are talking to them about swapping Chhara R-LNG with R-LNG from LNG terminals near HPCL's Mumbai (west coast) and Vishakapatnam (east coast) refineries," says a GAIL source. Under consideration is a swap deal where HPCL would supply R-LNG directly from Chhara to just one refinery: its upcoming 9m t/y Barmer refinery in southwest Rajasthan.
Barmer is already connected with the Mehsana to Bhatinda cross-country pipeline passing through Rajasthan. HPCL is an 11% joint venture partner in GSPL India Gasnet (GIGL), the GSPL-led consortium that has established the pipeline.
Supplying gas from Chhara to Mumbai and Vishakapatnam is more challenging, hence the proposed swap arrangement. GAIL would supply R-LNG to Mumbai and Vishakapatnam from the Dahej, Dabhol and Dhamra terminals.
Unlike IndianOil and Bharat Petroleum, HPCL has no stake, offtake or tolling agreement at any of India's seven operating LNG terminals. "We source R-LNG for our refineries and city gas operations from different suppliers," says an HPCL source.
"And we have not booked any capacity at any terminal." Once operational, HPCL aims to stop buying R-LNG from its suppliers and instead meet all of its demand from Chhara.
"We will be the anchor customer for Chhara," he adds. Chhara is now likely to be commissioned by December 2024.
HPCL announced that Chhara achieved 'mechanical completion' of the storage and regasification facilities on March 28 (2023). However, commissioning could not proceed because GSPL faced delays in laying the R-LNG evacuation pipeline.
Chhara finally received a commissioning cargo on April 11 (2024) after the pipeline was ready and tested in February this year (2024) but could not discharge the cargo because of a freak accident and diverted it to Dahej. "Earlier, the pipeline was delayed, and the terminal was ready for commissioning," says a source.
"Now the pipeline is ready, but the terminal is not ready."