Oz GEV, Indian Oil to Discuss CNG Supplies
Australia’s Global Energy Ventures (GEV), which develops compressed natural gas (CNG) projects globally, has signed a heads of agreement (HOA) with the Indian state-owned fuel retailer Indian Oil Corporation regarding supply of CNG, it said September 17.
The two companies will begin negotiations on a gas sale agreement (GSA) for the supply of about 220mn ft3/d of CNG to Dahej Port, located on the west coast of India. GEV will now proceed to select an import terminal site in the Gulf of Cambay in conjunction with Indian Oil Corporation. The Australian company said it has identified three potential gas sources in the Middle East region, all within a distance of approximately 2,500km from the Gulf of Cambay.
The gas delivery price will be linked to the Brent crude oil price. Once the final 20-year agreement is signed, supplies are expected to commence late-2021. GEV will deploy a fleet of six CNG Optimum 200 ships to deliver the required 220mn ft3/d of CNG, it said.
“With the HOA now signed with Indian Oil Corporation, GEV will progress its discussions in sourcing gas from the Middle East region and to assist with these negotiations, GEV has recently engaged Lewis Affleck as its strategic advisor for Middle East gas supply. GEV will also move to secure a suitable CNG import location at or near the Port of Dahej which is connected to the national Indian gas pipeline network,” GEV CEO, Maurice Brand said.
Brand expects India’s marine CNG supply into the west coast of India to expand from this initial 220mn ft3/d to over 650mn ft3/d, supported by CNG’s relatively low capital costs compared to LNG for the regional delivery of gas.
The present Indian government has set a target of doubling the share of gas in country’s overall energy mix to 15% in next five year. Recently, it concluded a successful city gas distribution (CGD) licencing round. The Indian oil minister earlier this month said that India is expected to have 10,000 CNG stations in the next ten years.