Petronet Mulls Raising Debt for Expansion
Petronet LNG is planning to raise about $1 billion in debt this year to expand its import capacity.
About $600 million will be used to build a new terminal on the east coast and $400 million to expand an existing facility on the west coast, Finance Director R.K. Garg told Bloomberg in an interview.
“Supply of natural gas in India is far short of demand and it gives us a chance to benefit from that,” Garg said. “It isn’t likely that domestic supply of gas will be enough and increasing LNG imports is a way out.”
Garg said that Gangavaram LNG terminal in Andhra Pradesh, which is expected to be ready by 2016, will cost about $900 million to build. This terminal will be able to convert 5 million tonne of LNG into gas every year.
Expanding the Dahej facility in the western state of Gujarat to 15 million tons from 10 million tons will require about $600 million and start by the end of 2015, Garg told Bloomberg. The company also plans to start another 5 million tons-a-year import plant at Kochi in south India at the end of this year, Garg said.
Petronet is in talks with LNG suppliers in countries including Australia, Russia, the U.S. and Canada for long-term contracts, Garg said. The company is looking for a mix of more- expensive oil-linked contracts and cheaper gas-indexed supplies, he said.