Energy Sector - 2

[Naresh]

<b>Petronet ties up gas from Exxon for Kochi project</b>

<b>NEW DELHI : Petronet LNG, a privately-registered firm promoted by state-run oil companies, has concluded the term sheet with ExxonMobil for shipping 1.5 million tonnes a year of gas for 20 years from Australia's Gorgon project being developed by the US energy major as part of a consortium led by Chevron.</b>

Petronet CEO Prosad Dasgupta said under Australian law the GSPA (gas sales and purchase agreement) is to be signed before June 30 and supplies were expected to begin 2014. Petronet will import the gas at the new facility it is building at Kochi in Kerala.

The gas will come as a relief to fuel-starved southern power plants, including state-run generation utility NTPC's Kayamkulam unit. <b>ExxonMobil can sell another 1.3 million tonnes of LNG but Petronet has not yet committed to additional volumes since it has yet to tie up consumers. NTPC, however, has not indicated any quantity for Kayamkulam.</b>

Chevron is the operator of the Gorgon project with a 50% stake, while Exxon Mobil and Shell hold 25% each. The project plans to develop the Greater Gorgon gas fields, located between 130 km and 200 km off the north-west coast of Western Australia. The Greater Gorgon fields are estimated to have reserves of about 40 trillion cubic feet of gas.

<b>Petronet is building the Kochi facility with a capacity to import and regassify 2.5 million tonnes of liquefied natural gas. It has raised $450 million in syndicated loan to part-fund the project. It has also ramped up the capacity of its existing facility in Gujarat's Dahej to 10 million tonnes a year where it has a 25-year gas supply contract with RasGas of Qatar.</b>

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