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Petronet proposes terminal at Mangalore — Hopes to team up with ONGC

Archana Chaudhary

Mumbai , March 11

PETRONET LNG Ltd (PLL) is planning to set up a five-million-tonne liquefied natural gas (LNG) import terminal at Mangalore, literally in the backyard of likely customer Mangalore Refineries and Petrochemicals Ltd (MRPL).

Petronet, which just concluded a successful IPO, is also asking ONGC Ltd whether it would be interested in joining the venture, as the oil explorer is planning a petrochemical complex near the southern port town, a senior PLL official told Business Line. "We have zeroed in on Mangalore because it is already a fully developed port, and the capital cost of breakwater construction and land development will be minimal," Mr Sham Sunder, Director (Technical), PLL, said. The company hopes to complete the project within the next three and a half years.

Petronet is seeking a joint venture with ONGC to make use of the land available with MRPL. "We are in talks with ONGC for a possible joint venture for the Mangalore terminal. ONGC's subsidiary MRPL owns some land at the planned location. So we hope it will be easier to set up a terminal there. Even without ONGC's partnership we see huge LNG demand from MRPL and other companies in Karnataka," Mr Sham Sunder said.

The company may also look for new LNG suppliers for the project. "We have a contract to buy 7.5 million tonnes from Rasgas. We can look to other sources for meeting additional LNG requirement. We could source LNG for the Mangalore project from Iran or even Yemen," the official said.

Petronet expects the Mangalore terminal to be cheaper than its recently inaugurated 2.5-million-tonne terminal at Dahej in Gujarat, which cost it Rs 2,577 crore to construct. The company is now doubling capacity of the Dahej facility and also setting up a new five-million-tonne terminal at Kochi. Work on all three projects would progress simultaneously. The company will spend $40 million more at Dahej to add a storage tank.

ONGC, which produces over 25 million tonnes of crude oil annually and owns the 9.69-million-tonne MRPL, has stated in the past that it planned to set up a petrochemicals plant in Mangalore. The company, which also owns 12.5 per cent of PLL, is in the process of setting up a Rs 560-crore C2 (methane) and C3 (propane) extraction plant at PLL's Dahej LNG terminal.

"Nearly one million tonnes of LNG could be used as feedstock by the proposed petrochemical plant. The MRPL refinery itself will have a large LNG requirement. Also, there is demand from power plants in Karnataka," Mr Sham Sunder said.

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