MoU signed to carry out a feasibility study; investment decision likely by early 2014

Representatives of a consortium formed by Oil and Natural Gas Corporation (ONGC), Bharat Petroleum Corporation Limited (BPCL) and Japan-based Mitsui & Company Limited, signed a Memorandum of Understanding (MoU) with New Mangalore Port Trust NMPT to set up a regasification LNG terminal at New Mangalore Port, in the city on Monday.

In a regasification terminal — the ultimate destination of LNG carriers — the liquefied natural gas (LNG) is returned to its initial, gaseous state, then fed into transmission and distribution networks.

The MoU was signed in the presence of Union Minister for Petroleum and Natural Gas M. Veerappa Moily.

The MoU documents the port’s no-objection to carry out feasibility studies and intention to extend all cooperation to the consortium. After the MoU, the feasibility study will be carried out covering technical, marine and environmental dimensions. An investment decision is expected by early 2014, said a press release.

Mr. Moily said that Karnataka was the only State left out without an LNG terminal. With the Mozambique gas find, the work of the consortium will be significant. Gas is the energy of this century and Karnataka is a beneficiary, he said.

P. Tamilvanan, Chairman, NMPT, said that the port handled 20.08 million tonnes of LPG, which is about 47 per cent of the country’s LPG consumption.

R.K. Singh, Chairman and Managing Director (CMD), Bharat Petroleum Corporation Limited (BPCL), said that Mangalore was the most strategic location (for the degasification plant) and the one issue of draught could be resolved by the port.

He said there had been a “great find of gas in Mozambique”. BPCL has a 10 per cent stake and Mitsui has a 30 per cent stake in the regasification venture. The gas could reach India and Mangalore, which is connected to East Africa (through the port).

Sudhir Vasudeva, Chairman, Mangalore Refinery and Petrochemical Limited (MRPL) and CMD, ONGC, said that ONGC was vying for another 20 per cent stake in Mozambique venture. BPCL and Videocon’s Mozambique subsidiaries are two of the consortium members each holding 10 per cent in the venture.

With ONGC’s entry, the deal would tilt in India’s favour, he said.

Mr. Singh said that Dabhol to Bangalore pipeline was complete and that he wanted to see it in Chitradurga and to be able to take the gas to Mangalore, Hubli, and Dharwad.

He said product pipelines were being contemplated from Kochi to Devanagundi (Bangalore) and from Mangalore to Bangalore. He also said that CNG terminal in Bangalore was being considered as requested by the Chief Minister.

The yardstick of a country’s growth was energy consumption, Mr. Singh said. India was the 13th largest energy consumer in the world. To sustain eight per cent growth rate in India’s gross domestic products (GDP), gas consumption must increase from 166 million tonnes a year to 400 million tonnes a year, he said.

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