MUMBAI: Energy companies operating in Mozambique, which reported one of the world’s biggest natural gas discoveries in recent years, are eyeing the vast Indian market and have started discussions with state energy firms, hoping that the African nation will follow Qatar’s footsteps in shipping vast quantities of gas to India.
Videocon International and public sector Bharat Petroleum Corp Ltd (BPCL), which hold 10% each in six blocks in the deep-water Rovuma Basin, off the Mozambique coast in Africa, are interested in selling gas in India.
The basin may hold 30 trillion cubic feet of gas, which can be liquefied and transported to Asia.
European energy major Royal Dutch Shell Plc, which runs an LNG terminal at Hazira through a joint venture, has agreed to acquire Cove Energy that has stakes in energy assets in Mozambique, for $1.8 billion. This development would help ship gas to India, BPCL chairman RK Singh told ET.
“Now, with Shell on board, we can use their LNG terminal in Hazira to bring the gas to India and can also create a market for Petronet’s new terminal in Kochi and also use the new capacity being added at its Dahej terminal,” said Singh.
BPCL is a promoter of Petronet LNG that is expanding its Dahej plant from 10 million tonnes per annum to 15 mtpa, and building a 5 mpta terminal at Kochi.
A source close to Shell India said it was too early to comment but India clearly needs gas. “So it could be a definite possibility, but also a lot of new LNG terminals are slated to come up soon so all sort of linkages are possible,” the source said.
Singh said talks with other energy companies in India had already begun.
“Representatives of Texas-based Anadarko, the operator of the block, have already visited us and have also had preliminary discussions with GAIL and GSPC to understand the modalities of joint investments in setting up downstream infrastructure to transport and market the gas produced in the Rovuma basin to India,” said Mr Singh.
Videocon Industries CMD Venugopal Dhoot said India was a huge market for gas from Mozambique. “We are very keen to bring the gas from Mozambique to India as we see a huge potential and our research shows that in value terms, we can sell around Rs 1,53,000 crore of this gas in India. We have had regular interactions with our foreign partners who are also very keen to target the India market,” said Mr Dhoot.
“We at BPCL will take the lead in initiating all investment and downstream marketing activities in India and will also invest $1.9 billion in building downstream infrastructure in Mozambique for the liquefaction of the gas, building jetties and transporting the gas,” added Singh.
Mr Singh said all companies involved in developing the Rovuma Offshore Area 1 in Mozambique are planning to jointly invest $19 billion in infrastructure to transport and market gas.
“Our team at Bharat Petro Resources and representatives from Videocon Hydrocarbon meet the foreign partners regularly, almost every month and are working hard to make sure that gas from Mozambique is brought to India,” said Singh.
Mozambique authorities say that gas production from the Rovuma basin will start in the next 5-6 years.
India is facing a huge shortfall in natural gas production, particularly since output from Reliance’s D6 block has been declining for more than a year.
India’s LNG imports up to January this year are estimated to have jumped 89.5% over last year.
India, the world’s eighth-largest LNG importer, aims to double its LNG imports from Qatar to 15 million tonnes a year, according to government estimates.
India’s natural gas demand is likely to more than double to 473 million standard cubic meters per day by 2016-17 with most of incremental demand coming from power plants.
As per the projections made by the oil ministry the current gas demand of 189 mmscmd is likely to rise to 473 mmscmd.