Mangalore Refinery and Petrochemicals Ltd. is in initial talks with three companies including Royal Dutch Shell PLC (RDSA) to build a liquefied natural gas terminal in India, a senior MRPL executive said Tuesday.
“Several issues like ownership, gas sourcing, investment, the size of the terminal are under discussion,” the executive, who didn’t wish to be named, told Dow Jones Newswires.
GAIL (India) Ltd. and Petronet LNG Ltd. are the other companies MRPL is talking to, the executive said.
MRPL, a unit of state-run Oil & Natural Gas Corp. , operates a 236,000-barrel-a-day refinery at Mangalore in the southern state of Karnataka. It is looking to invest in an LNG terminal as it seeks cheap gas for its petrochemical plant and refinery.
“We need 2.8 million standard cubic meters of gas a day, and an investment into an LNG terminal would be the best way to secure supply,” the executive said.
Shell India declined to comment on the matter while GAIL didn’t immediately comment. A Petronet executive, who didn’t want to be named, said that “discussions have been held with MRPL for a terminal at Mangalore but there isn’t anything concrete.”
A shortfall in domestic gas supplies has led to strong LNG demand in India from refiners and petrochemical plants.
India has two operational terminals–Petronet’s 10-million-ton-a-year Dahej facility, and Shell and French oil company Total SA’s 2.5-million-ton-a-year Hazira plant.
LNG supplies in India have limited headroom as the two existing terminals are operating at peak or near-peak capacity, Credit Suisse said in a note in August.
The lack of domestic supplies has increased interest in more LNG terminal capacity, with Petronet, Indian Oil Corp., Gujarat State Petroleum Corp. and others evaluating building new projects, Credit Suisse said.
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