Petronet-LNG proposes 'LNG hub' concept

Vol 14, PW 8 (07 Oct 10) Midstream & Downstream

Fighting competition from cheap D6 gas, Petronet-LNG’s attempt to poach customers from Gujarat Gas reflects a wider strategy to maximise LNG sales.

One idea studied in depth is to reach potential customers in remote areas where there are no established gas pipelines by setting up small LNG ‘hubs’. “Petronet-LNG’s technical department is preparing a ‘note’ on this concept,” confirms a source.

“It should be ready this month (October) and will be presented at the next (Petronet-LNG) board meeting for approval.” The idea, he explains, is to set up small LNG storage and regasification facilities in hard-to-reach locations where there are just three or four potential gas customers.

LNG in cryogenic tanks could be transported from Dahej to storage facilities by truck. It could then be re-gasified and supplied to customers through relatively short pipelines.

“Petronet-LNG could also choose to set up small regasification facilities at each factory,” says another source. “The economics of this depends on gas demand and could be viable if Petronet-LNG can sell at least a few thousand cm/d.

” Also explored is a proposal that Petronet-LNG could share with these remote customers the costs of setting up the LNG hubs, he adds. Last month (September) a Petronet-LNG team pitched the LNG hub idea to the Gujarat State Road Transport Corporation (GSRTC) so it could use LNG as fuel for buses.

“GSRTC feels the idea is workable,” we hear. After meeting with GSRTC, the same team travelled to Kochi in Kerala, where Petronet-LNG is constructing a 2.5m t/y LNG receiving terminal, where they met the Kerala State Road Transport Corporation (KSRTC), which also liked the LNG ‘hub’ idea.