BP enters LNG consortium at Kakinada

Vol 4, PW 19 (25 Oct 00) Midstream & Downstream

It is a secret no longer.

In the last issue of Petrowatch we revealed BP's intention to become a key player in the Indian LNG sector. It has subsequently emerged that BP is in talks with Indian Oil Corporation, Petronas of Malaysia and the Cocanada Port Company of Singapore to become the fourth partner in a planned LNG development project at Kakinada in Andhra Pradesh.

This report learns the four companies are working on the details of an agreement, which - if all goes to plan - should be ready for signing by the end of this month. On 12th October, representatives from the four companies met in the Andhra Pradesh capital Hyderabad to discuss the critical issue of who will be the project's LNG supplier.

Petronas has made no secret of its ambition to be the supplier of choice at Kakinada. On July 13th Indian Oil signed an agreement with Pertamina for the same, and BP, as reported in Petrowatch, continues to look for a home for the vast quantities of gas it inherited post merger with ARCO and AMOCO.

A source admits the issue of LNG supply is the most critical facing the consortium. As for equity breakdown, it has been reported that Indian Oil, Petronas and BP will each acquire 26% and that Cocanada will take 22%.

"These figures are meaningless," learns Petrowatch, "Talks are at a preliminary stage."