Petronet-LNG dismisses talk of LNG price war

Vol 5, PW 25 (13 Feb 02) Midstream & Downstream

ARE WE SEEING the start of a price war among LNG importers as they vie with one another to capture the market for customers PETROWATCH learns Shell is offering Hazira LNG at a $0.10/mm btu discount to any price quoted by Petronet LNG, while Reliance is offering regassified LNG ex-Jamnagar at $2.92/mm btu.

A price circulating for Petronet LNG's regassified LNG ex-Dahej is $3.18/mm btu. Is Petronet LNG worried "These are all gimmicks," retorts a senior company official.

"Reliance has yet to begin any work on the ground. We are far ahead of Shell in construction work.

Ask Shell if they have awarded the EPC contract They haven't. This is a major milestone.

You have to pay 10% of the contract price up front to the successful EPC bidder. We are well past this stage." Petronet LNG says its contracted price for LNG is cheaper than that paid by Enron for its Dabhol LNG terminal or that paid by Japan, South Korea or Taiwan.

"We have also negotiated the cheapest (LNG) shipping time charter in the business." Shell however, is not deterred. We hear that next month it will sign agas transmission agreement with Gujarat State Petronet for regassified LNG from Hazira and that Nitin Shukla, managing director of Gujarat PowerGen Energy will soon join Shell subsidiary Hazira LNG Limited as head.

Where is BG with its 5.4m t/y Pipavav LNG terminal "We are not going to start any work at Pipavav till we tie up the sale of LNG," the Economic Times on 9th February quotes BG India chief Nigel Shaw.