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Qatar likely to supply more LNG to India

NEW DELHI— Qatar is likely to supply 1.25 million tonnes of liquefied natural gas (LNG) to India on a year-to-year basis in addition to the 7.5 million tonnes already contracted for supply over a 25-year period.

An indication of Qatar's willingness to supply additional LNG was received during Petroleum Secretary S.C. Tripathi's meeting with officials of ExxonMobil-promoted RasGas earlier this month, a petroleum ministry source told IANS.

"Qatar has agreed to supply additional LNG on a short-term basis. They have agreed to sign an agreement keeping a window open to negotiate the price and quantity," the source said.

The supply of additional LNG, likely to begin next year, will be negotiated on an annual basis, sources said. India has been receiving five million tonnes of LNG at Dahej in Gujarat from Qatar since January 2004 under a 25-year contract.

In addition, RasGas has contracted to supply 2.5 million tonnes of LNG at the Kochi terminal of Petronet LNG once it is completed by 2009 end. Even in this case "certain conditions are preceded. We are trying to expedite that.

Qatar had indicated that the 2.5 million tonnes of LNG would be supplied from 2009 end but India is keen to have the supplies earlier as the Petronet LNG regassification terminal of five million tonnes capacity is equipped to handle about 6.5 million tonnes.

The Dahej terminal, which was the first LNG terminal to be commissioned in India, is currently in the process of being expanded to handle 10 million tonnes of LNG regassification. The expansion is slated to be completed by 2008 end.

With spare handling capacity available, India is keen to have more LNG supplies from Qatar to meet the growing domestic needs.

As Qatar has already committed most of its current production to various countries, India is hoping it would be able to persuade RasGas to supply some of its spare capacity estimated to be around 1.25 million tonnes.

A major catch of course is the price of LNG being negotiated, with global gas prices also rising though not as yet on the scale of crude oil.

India is currently able to meet only half of its gas requirement with 65 million standard cubic metres per day (MSCMD) of supplies available from domestic sources and about 25 MSCMD available through regassified LNG.

"As the Kochi terminal project is running behind schedule we are considering taking supplies intended for that terminal at Dahej. The additional 1.25 million tonnes of supplies from Qatar on a short-term basis will help to bridge the gap till the 2.5 million tonnes supplies become available," sources said. In the case of the Kochi terminal, which is now likely to be completed by 2010, India is looking of LNG supplies slated to come from Iran.