The greenfield project is estimated to cost Rs.4,500 crore

Petronet LNG will set up its third terminal at Gangavaram in Andhra Pradesh. The decision to set up a greenfield project was taken at the company's board meeting held here on Friday.

Addressing presspersons, B. C. Chaturvedi, Secretary, Ministry of Petroleum and Natural Gas, said French company Tracta Bel would prepare a detailed feasibility report. The cost of the project, having a capacity of 5 million tonnes per annum, is estimated at Rs.4,500 crore.

He said the Kochi LNG project was progressing as scheduled. It would be ready by July. Operations are expected to commence in October. According to a long-term contract with Australia, gas to the Kochi terminal will be available from Gorgon in Western Australia by 2015. Petronet LNG will source gas from spot market in multiple locations to meet the gas requirement till then.

Asked whether pricing of the gas at $16 per mBtu (million British thermal units) would be viable for buyers in the region, he said it would be feasible for buyers who were using furnace oil and naphtha as feedstock. Laying of pipelines to Bangalore and Mangalore by GAIL was fast progressing, he said.

A. K. Balyan, Managing Director and CEO, Petronet LNG, said the board had decided to increase the capacity of the Dahej terminal in Gujarat by 5 million tonnes per annum beyond its present capacity of 10 million tonnes in the wake of huge demand for natural gas there. An additional jetty, which is under construction there, will be commissioned by September 2013.

Mr. Balyan said the Kerala Government would be urged to provide power purchase guarantee to ensure feasibility of the power generation projects sourcing LNG from the Kochi project. Since the price of LNG had increased, the price of power would also be costly, he said.

Third quarter profit up

During the quarter ended December 31, 2011, the company's turnover has risen to Rs.6,330.26 crore, an increase of 75 per cent over the corresponding quarter last year. The net profit had increased to Rs.295.38 crore, up 73 per cent from the corresponding quarter last year. The increase in net profit is on account of additional volumes, improved margins, and higher operational efficiency, according to him.

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