Petronet LNG Ltd is negotiating with Ras Gas of Qatar to start delivery of 2.5 million tonne liquefied natural gas consignment three months ahead of the schedule.
Ras Gas has commitment to start supply of this parcel of LNG to PLL from January 2005. Petronet, is however, trying to pursue Ras Gas to start delivery from October itself.
If the Qatar company agrees, it would give PLL close to one million tonne of extra volume during the October-December quarter, over and above the 2.5 million tonne LNG parcel, which Ras Gas is already supplying at Dahej for PLL.
The company is trying to bring the cargo ahead of schedule as the second LNG tanker, 'Rahi', being manufactured by Daewoo Shipbuilding and Marine Engineering of Korea, is almost ready. Even though PLL has agreement to take delivery in December, the company intends to take it in September.
PLL has re-gassification capacity of 6.5 million tonne. The company official said it was confident of selling extra quantity of gas as there was huge pent up demand in the states where it was already selling its R-LNG.
If the company gets the additional volume from Ras Gas or other sources, PLL's financial will be a lot better this fiscal. The company has projected a loss of Rs 171 crore (Rs 1.71 billion) for 2004-5 factoring in the fact that it would use only 2.5 million capacity.
Apart from Ras Gas, the company is also looking at other sources to bring extra volume. "We are ready to enter in short term agreement with producers but it has to be delivered at Dahej since we have only two tankers with annual capacity of 2.5 million tonne," a PLL official said.
In other words, the company will buy at the cost, insurance and freight price compared with the free on board price, which it is paying to Ras Gas.
The possibility of getting additional volume could be hamstrung as the demand for LNG has gone up manifold in recent times. US has turned out to be a big buyer and it is gobbling spot cargo at every possible price.
For instance, PLL is buying LNG at $2.53 per MMBtu from Ras Gas, while for America delivery from Qatar, the price has gone up to $4.7 per MMBtu. Industry people are skeptical whether Ras Gas would be ready to start delivery at the mutually agreed price.
