Petronet Seeks Bids to Lease Storage at Kochi LNG Plant

India's biggest gas importer Petronet LNG has invited bids to lease storage at its Kochi regassification plant in Southern India due to a lack of pipelines connecting its key demand centers, its head of finance said.
 

Petronet is currently operating its 5 million metric tons a year Kochi plant on the east coast at a fraction of its capacity as land-related issues have delayed the two pipelines that would link the terminal with customers in Bangalore and Mangalore.

"Timeline for building the two pipelines is uncertain, so we are exploring various options including use of storage at Kochi terminal by someone who can bring their own LNG (liquefied natural gas) and sell it in other markets," said R. K. Garg, the company's director of finance.

The Kochi terminal on the west coast has two LNG storage tanks of nearly 182,000 cubic meters capacity each, according to the advertisement posted on the company website.

Initially the company wanted to lease the storage for two years, Garg said. "Hopefully things will improve by then," he added.
 

Petronet has a deal to annually buy 1.5 million metric tons of LNG from Australia's Gorgon project.

"(Supplies from) Gorgon would come by the end of 2015 so it is less than two years. The supplies will rise to the contracted volume in 2017," said Garg.

Petronet will lease out almost half of the capacity at its Dahej liquefied natural gas (LNG) terminal to state companies from 2017 as prices for the high-cost fuel have cut demand, Garg had said in February.

(Reporting by Nidhi Verma; Editing by Anupama Dwivedi)