India Petronet to expand Dahej LNG terminal's capacity

NEW DELHI: Petronet LNG, India's top liquefied natural gas (LNG) importer, plans a 29% increase in its Dahej terminal's capacity to 22.5 million tonnes per annum (mtpa) to meet rising demand, its chief executive said on Friday.

Indian companies are investing billions of dollars to build infrastructure, including pipelines and a new LNG import terminal, as Prime Minister Narendra Modi wants to raise the share of gas in energy mix to 15% from 6.2% to help curb emissions.

Capacity at the 17.5-mtpa Dahej terminal in western Gujarat state will be increased in two phases, chief executive A. K. Singh told a news conference. It will add 2.5 mtpa in the first phase within three to four years, followed by another similar expansion.

The International Energy Agency in its latest report said India's LNG imports are expected to quadruple to 124 billion cubic metres, or about 61% of overall gas demand by 2040.

Raising the share of gas to 15% would require a four-fold increase in gas consumption from the current 150 million cubic meters a day, Singh said, adding his company sought to build a new LNG import terminal on the country's east coast as well as expanding at Dahej.

To meet the country's growing gas demand Petronet is looking for flexible gas import contracts of 10 years or less instead of the standard long-term contract of 25 years, he said.

Petronet operates a 5-mtpa terminal at Kochi in Southern India. Singh said the terminal would operate at about 30% by the end of this year compared to the current 20% as more customers are linked to the gas pipeline.

He said capacity use at the terminal would rise to over 80% when a pipeline linking Petronet's project to the national grid is ready.