Reliance aggressively buying R-LNG

Vol 13, PW 26 (17 Jun 10) Midstream & Downstream

Reliance was India’s largest R-LNG consumer during 2009 and looks set to repeat that feat in 2010.

PETROWATCH learns the Mumbai-based Indian oil giant has bought approximately 60% of a 63,111.11-tonne LNG cargo (137,950.8 cubic metres) from Qatar Gas. This cargo arrived from Qatar’s Ras Laffan Port to the Hazira terminal operated by Shell (74%) and Total (26%) aboard LNG tanker Al Ghariya (above left) on (Thursday) June 3.

The ship then left Hazira on June 4, immediately after unloading. “This is the third cargo for Reliance that’s come to Hazira in the last 90 days,” reports a source.

Essar is believed to be buying the rest of the Al Ghariya cargo, but this could not be independently verified. Reliance had earlier swallowed up most of a 61,135.83-tonne (135,545.63 cubic metre) cargo from Nigeria LNG on March 27, and most of a 71,679-tonne (163,018 cubic metre) cargo imported from Yemen LNG on April 27.

But as India’s largest gas producer, why does Reliance continue to depend on LNG imports Reliance uses a large portion of the R-LNG from Hazira spot cargoes as feedstock for its twin refineries at Jamnagar in Gujarat. At present, Reliance receives just 2.34m cm/d of D6 gas from Gujarat Petronet’s pipeline network for the twin refineries, even though its actual requirement is four times that, around 11.8m cm/d.

Reliance also uses R-LNG for three petrochemicals complexes – one at Hazira, another at Jamnagar near the refineries, and a third at Patalganga in Maharashtra. Essar by contrast is believed to be using R-LNG from Hazira to replace some of the 1m cm/d of gas for its 515-MW Hazira power station, before supplies were cut on May 31 by GSPC who complained Essar is poorly managing its Daily Contracted Quantity (DCQ).