Petronet to hike Dahej capacity as Kochi terminal idles

Petronet LNG Ltd is planning to hike handling capacity at its Dahej terminal, in Gujarat, to 17.5 million tonnes from the current 10 million tonnes, even as India's biggest gas importer is struggling to utilise capacity at its Kochi terminal.

Petronet has awarded contracts that will raise handling capacity at the Dahej terminal to 16 million tonnes by 2016.

The company hopes to expand capacity to 17.5 million tonnes by improvements to project design and debottlenecking of current operations, its chief executive A K Balyan said on Wednesday.

"We have awarded all contracts for expansion of the capacity from 10 million tonnes to 15 million tonnes. By November 2016, Dahej terminal would be operating at 15 million tonnes capacity," Balyan said.

Petronet, he said, has completed commissioning of a second jetty, allowing larger vessels carrying liquefied natural gas (LNG) to dock at the port.

"We can now import bigger Q-Flex ships, with 216,000 cubic meters capacity, all around the year and Q-Max vessels, with 266,000 cubic meters carrying capacity, during fair weather (when sea is not rough)," he said.

The second jetty would give Petronet more flexibility of imports.

Petronet, which had in September last year, commissioned a 5 million tonnes import terminal at Kochi in Kerala, is building a similar terminal at Gangavaram in Andhra Pradesh.

Petronet, which is yet to get the state government's nod for the east coast facility, however, is struggling to fully operationalise its Kochi terminal so as to recoup millions of dollars invested in setting up the terminal.

The company is now exploring the possibility of tapping demand in the Andaman and Nicobar islands, in Sri Lanka and in leasing part of the storage at its 5-million-tonne-a-year LNG plant, Balyan said, adding that Russia's Gazprom and US-based Excelerate Energy are among the companies that have shown interest in leasing the storage.

Petronet is using barely 1 million of the Kochi terminal's handling capacity.

"We have all statutory approvals in place. All that we now need is a no-objection certificate from the Andhra Pradesh government. The NOC got delayed because of the review of contractual arrangements between the state government and the Gangavaran port. We are now given to understand that the NOC will come anytime now," Balyan said.

Petronet annually imports 7.5 million tonnes of LNG from Qatar's RasGas under a 25-year contract. Besides, it has signed a deal with RasGas to buy 0.8 million tonnes of LNG for supply to Indian Oil Corp (IOC) in the current fiscal.

Petronet LNG is hamstrung by the delay in the setting up of two inter-state gas pipelines that connect consumers with the terminal, even as it lost its biggest customer in Kerala, Fertilisers and Chemicals Travancore Ltd (FACT) because of cash constraints at the fertiliser maker.

The other client is Bharat Petroleum Corporation.

Petronet is now thinking of diverting its third spot cargo planned for arrival at Kochi in June to its Dahej terminal if there is no firm commitment from consumers, including FACT.