Petronet LNG Ltd, the operator of the world’s largest liquefied natural gas (LNG) import terminal, will invest Rs 40,000 crore over the next 4-5 years, including in overseas supply sources, its CEO AK Singh has stated.
Petronet plans to enter the petrochemical business by investing Rs 12,500 crore in a Propane Dehydrogenation Plant that will convert imported feedstock into propylene, as well as set up a floating LNG import facility at Gopalpur in Odisha at a cost of Rs 1,600 crore, he told reporters.
The firm, which had last year allowed an initial non-binding agreement to invest $2.5 billion in US energy upstart Tellurian’s LNG project in Louisiana in return for gas supplies for 40 years lapse, will look at investing in overseas projects such as gas fields that feed into plants turning the fuel into liquid (LNG) and liquefaction plants.
“We always evaluate good opportunities for overseas investment. If it is beneficial for the country and if we find it a better option, we will go for it,” Singh said. LNG is natural gas cooled to -162 degrees Celsius to turn it into liquid for ease of transportation via ships. India’s domestic natural gas production barely meets half the demand of power, fertiliser and CNG sector and the rest is imported in form of LNG.
Singh said Petronet will invest Rs 17,000 crore in domestic LNG import capacity addition and petrochemical foray. The investment includes Rs 600 crore in raising the capacity of the Dahej LNG import terminal in Gujarat to 22.5 million tonne per annum from the current 17.5 million tonne, Rs 1,245 crore in building an additional storage tank and bays for truck loading of LNG.
The Dahej import terminal is the largest in the world and the port will host a third jetty where propane, ethane and LNG can be imported, he said. Petronet, which operates a 5 million tonne a year import facility at Kochi in Kerala, will set up a 4 million tonne a year floating storage and regasification (FSRU)-based LNG import facility off the Gopalpur port that later will be turned into a land-based terminal with a higher 5 million tonne capacity, with scope for raising it in future, he said.
The company had some years back planned to set up a terminal at Gangavaram in Andhra Pradesh for the import of supercooled gas in ships. The company management stopped pursuing that terminal in 2015-16 on the grounds that there isn’t enough demand to justify a 5 million tonne a year import facility. Soon after that, Adani Group began work to set up a 5 million tonne a year import terminal at Dhamra port in Odisha.
Petronet now sees that there is demand for gas in the eastern region and despite the Dhamra LNG terminal, it is now looking for a facility at Gopalpur. Petrochemicals, made using crude and natural gas as feedstock, form raw material for plastics, packaging material, and personal care products. In terms of volume, the petrochemical market in India stood at 42.50 million tonne and is estimated to reach 49.62 million tonnes by 2025, expanding at a compound annual growth rate (CAGR) of 6.14 percent between FY 2021 and FY 2025.
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