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India Updates
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INFRASTRUCTURE STATUS TO LNG PROJECTS UNDER CONSIDERATION: SHRI RAM NAIK
New Delhi ~ June 27, 2001
Shri Ram Naik Minister for Petroleum and Natural Gas has said that the Government is making efforts to make Liquefied Natural Gas (LNG) a competitive fuel. Inaugurating a seminar on "Development and Utilisation of LNG" organised by FICCI here today Shri Naik said that in the last General Budget removal of countervailing duty (CVD) was announced. He informed that the Government is considering infrastructure status for LNG import
projects. A comprehensive policy on LNG imports will be announced shortly by the Government Shri Naik said. Elaborating the efforts by Petronet LNG Limited (PLL) the Minister made a special mention about the supply of LNG at competitive rates to consumers by the company. It may be noted that Petronet LNG Limited is a company promoted by four Navaratna Oil PSUs namely IOC, BPCL, ONGC and GAIL. Besides Gaz de France the biggest Gas Company of France has signed an agreement to take up 10% equity in PLL. The company is setting up two LNG import terminals (5 MMTPA at Dahej
Gujarat and 2.5 MMTPA at Kochi Kerala). The Minister informed that PLL has received most competitive offers for all the activities in LNG chain for Dahej Terminal and will pass on the benefits to consumers. Regasified LNG as a fuel not only holds a higher value addition for some of the core sectors like Power Fertilisers etc. but also holds a premium on environment protection over other liquid fuels. Several Indian and Foreign projects have shown keen interest on development of LNG projects at 14 locations -- both on West and East Coast of India. Most of the foreign companies have been issued FIPB (Foreign Investment Promotion) clearance to set up LNG terminals. The projects proposed to be implemented by Shell at Hazira
(Gujarat), CMS Energy/Unocal/Grasim at Ennore (Tamilnadu), IOC/Petronas at Kakinada (AP), Tata/Total/GAIL at Mumbai (Maharashtra) and British Gas at Pipavav (Gujarat) have shown some progress. It is likely that in short run about 4 to 5 projects may come up in the country Shri Naik added.
The Minister further said that India as of today has a total allocation of gas to consumers of more than 115 MMSCMD and the natural gas available from domestic production for the end-users is about 65 MMSCMD leaving thereby a deficit of about 50 MMSCMD. The demand supply gap for natural gas as per the Hydrocarbon Vision 2025 document is likely to go up to 284 MMSCMD by 2011-12. This is one of the reasons why the government has
laid thrust on gas imports through LNG route. However the Ministry of Petroleum and Natural Gas is making its best efforts to enhance the production of natural gas from domestic basins by giving a large thrust on exploration in Indian basins. Contracts for 24 oil and gas exploration blocks have already been signed under NELP-I last year. The Award of 23 more blocks have also been finalised on 6.6.2001 under second bidding round of NELP and the contracts will be signed shortly.
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