Petronet-LNG unimpressed by NTPC's quest for LNG

Vol 6, PW 13 (28 Aug 02) Midstream & Downstream

PETRONET-LNG IS unimpressed with NTPC's effort to acquire LNG or natural gas.

A senior Petronet LNG official openly mocks the NTPC tenders for port and gas consultants. "They are just passing time," he claims.

"Mark my words they will not do anything. They have been talking to us on this for the past four years." NTPC has five power stations that it wants to expand.

"They know the locations where they need gas and the quantities of gas they need. Why do they need a gas consultant Are they going to sell gas to other customers" Petronet-LNG is similarly scathing about NTPC's tender for a port consultant.

"There is hardly any domestic port consultant with experience of LNG or natural gas. Why do they need a port consultant when the supplier will set up the import terminal and related facilities" But NTPC thinks otherwise.

"We may not set up a terminal, but we have to evaluate the marine facilities that the supplier claims to have. How can we blindly accept their claims After all we will be entering into a 20-year contract with the supplier." Petronet-LNG also ridicules NTPC's aim of a fixed price delinked from crude.

"If they want a fixed price they will get it. But can they afford it Suppliers will work out an average price over 20 years.

Such a price will be higher and NTPC will respond saying the price is too high for them." Another likely supplier echoes Petronet-LNG's concerns and suggests that NTPC - armed with presentations from potential suppliers - ought to have invited price bids immediately instead of inviting bids for a gas or port consultant.