India’s Petronet LNG approves Gopalpur FSRU project

India’s Petronet LNG said it had decided to build its planned FSRU-based import facility at the Gopalpur port in Odisha, as it looks to establish its presence on the eastern coast of the country.

The country’s largest LNG importer already operates the 17.5 mtpa Dahej terminal and the 5 mtpa Kochi plant on the west coast of India.

Petronet said that its board of directors held a meeting on November 9 and “accorded investment approval” for setting up of the first phase of the LNG terminal which includes an FSRU, with “provision for conversion” to a land-based terminal.

The total project cost is about 23.06 billion rupees ($285.5 million), including taxes and duties, according to Petronet.

Petronet expects to add the proposed capacity in about three years and plans to finance the project with debt and equity.

The firm did not provide any additional information.

Petronet previously said the new Gopalpur floating LNG terminal would help meet the increasing gas demand of the eastern and central part of the country.

It also said that the land-based terminal would have a capacity of 5 mtpa.

In talks with offtakers, small-scale LNG

Petronet’s finance chief Vinod Mishra said during the company’s results conference call on November 10 that the company now has to sign a term sheet with the Gopaplpur Port and also secure the environmental clearance for the project.

The company plans to launch tenders in the upcoming period for the jetty, pipeline, etc.

Mishra said that the firm is in talks with “many people, including offtakers” for at least 30 percent or 40 percent of terminal’s capacity.

He also said that Petronet plans a small-scale LNG development in Gopalpur as there are many mining firms located in the region.

As per the FSRU, Mishra noted that it would be challenging to charter an FSRU due to the current market and a surge in European demand. European countries such as Germany, the Netherlands, and Italy have booked a large number of FSRUs this year.

Petronet would look to get a daily charter price for an FSRU of about $70,000, $80,000 per day.

“But as of now, market is not good to assess whether this will continue like this. In the future, prices will be lower and perhaps we will be able to hire FSRU. And there is no issue as such,” Mishra said.

Petronet reported lower volumes at the company’s two regasification terminals during the July-September period of this year.

India’s monthly LNG imports have been constantly dropping this year due to mostly high spot prices.

During April-September India took 14.70 bcm of LNG, or some 10.8 million tonnes, down by 11.3 percent when compared to the same period last year, PPAC said last month.

(Article updated to include more information regarding the project.)

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