Petronet LNG Seeks Fresh Foray Into The Petrochemical Business

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19 Jan 2023
5 min read

News Synopsis

Latest Updated on 19 January 2023

The largest liquefied natural gas importer in India, Petronet LNG Ltd would invest 2,306 crores to build a floating LNG receiving facility at the Gopalpur port in Odisha.

According to a tweet from the company it has inked a deal with Gopalpur Ports Ltd. The facility would have a capacity of around 4 million tonnes yearly.

By signing a term agreement with Gopalpur Ports Limited on December 14th, 2022, for the construction and operation of an LNG terminal at Gopalpur port in Odisha, @PetronetLNGLtd is moving closer to establishing its footprint on the east coast of India the company said.

The company's board approved the Investment last month for constructing the LNG terminal at Gopalpur that would employ floating storage and regasification unit.

Natural Gas has been converted into LNG a liquid that is 1/600th of its original volume. This facilitates simple ship transport. It is converted back into gas at the receiving facility before being sent to producers to create fertilizer for Power Plants to produce Electricity or to be converted into Compressed Natural Gas (CNG) for use in Vehicles.

A combination of loan and equity would be used to fund Petronet's project in the Ganjam district of Odisha which is expected to be operational by the end of 2025.

Last Updated on 13 September 2021

Petronet LNG Ltd's new petrochemical business will assist the country's largest gas importer in regaining lost Opportunities from the previous decade. Petronet has long planned to develop an import terminal in Gangavaram, Andhra Pradesh, to import supercooled gas in ships. Due to a lack of demand, a 5 million-tonne-per-year import terminal was closed in 2015-16. Petronet's long-term LNG import agreement with Qatar asked for 5 million tonnes per year of rich gas, or gas containing ethane and propane - chemicals required in petrochemical manufacturing. ONGC uses the rich gas in its petrochemical facility to produce value-added chemicals, and Petronet intends to follow suit.

Crude Oil and natural gas are utilized as feedstock in the manufacture of petrochemicals. The Indian petrochemical market is anticipated to reach 49.62 million tonnes by 2025, growing at a Compound Annual Growth Rate (CAGR) of 6.14 percent. Ethylene may be used to create plastics and detergents, while propane can be used to make plastic. GAIL (India) Ltd and oil and gas producer ONGC each share 50% of Petronet, a joint venture between state-owned refiners Indian Oil Corp (IOC) and Bharat Petroleum Corp. (BPCL). Petronet intends to develop a floating LNG facility at the Gopalpur port in Odisha as part of its eastern coast presence. Petronet has previously completed a floating storage and regasification (FSRU) terminal with a capacity of 4 million tonnes per year, and a pre-feasibility assessment for a 5 million-tonne land-based terminal is being developed. Dahej Terminal has an import capacity of 17.5 million tonnes per year. However, due to a paucity of pipes, the Kochi port is presently only operating at a quarter of its full capacity.

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