Petronas talks to Indian consortium for LNG terminal

Vol 9, PW 22 (23 Feb 06) Midstream & Downstream

Petronas is still keen on India, despite its failure to win gas supply contracts for NTPC, Karnataka Power or Indian Oils proposed east coast LNG terminal during past attempts.

Undeterred, we hear Petronas is in talks with an Indian consortium to set up a LNG import terminal on the east coast at Karaikal in Pondicherry. An industry source tells us a team from Bangalore-based Marshals Group and Adani Energy were in Kuala Lumpur in the second week of February for talks with Petronas.

Discussions between the Marshals Group who is promoting the LNG terminal at Karaikal - and the Petronas Gas Business Unit began in July 2005 during a visit to KL by the Indian side. Since then Marshals has been trying to bring together a consortium to set up the LNG import terminal and a 1000-MW power station at Karaikal.

For now the consortium appears to include Marshals, Petronas, Adani Energy, Aban Loyd and Sumitomo of Japan. Last month, Petronas subsidiary Malaysia LNG wrote to Marshals referring to discussions between both sides in November 2005 and said it is, currently looking at the possibility of marketing 1.2m t/y LNG from Iran, with targeted first supply date in the first quarter of 2010.

Malaysia LNG adds that it is, unable to positively confirm the volume availability as the liquefaction plant project will only reach its Final Investment Decision targeted in mid-2006. Continues Malaysia LNG: Subject to supply availability and the terms we wish to inform you that MLNG is willing to further discuss the supply of the above-mentioned volume to (Marshals subsidiary) IP Gas.

Despite ongoing talks with Marshals, Malaysia LNG makes clear it is also in parallel, non-exclusive discussions with other prospective customers in and outside India. Will Petronas be part of the proposed Karaikal LNG consortium We are still considering our position, writes the company.

We are keeping our options open and hope that IP Gas will also keep the options available for us.

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