State-owned Indian Oil Corporation (IOC) expects that its recently commissioned Ennore liquefied natural gas import facility on the nation’s east coast will not be operating at its full 5 million tonnes per annum capacity until the end of 2020, writes Amanda Battersby.

“Ennore.. construction is fully complete, we have laid the first phase of pipeline, and we have started feeding the nearby refinery, fertiliser plant and petrochemical complex,” said IOC chairman Sanjiv Singh.

“However, the numbers (send-out volumes) are still small because these industries have to probably do a little more rectification to increase gas consumption.

“The other phases of the pipelines are also under execution, which may take a little time, because for quite some time, there were little delays in pipeline laying,” Singh told Upstream.

“So I think by next year-end everything should be complete. We should be seeing those numbers (5 million tpa).”

IOC has, meanwhile, embarked on a strategy of evaluating taking capacity in other players’ LNG import projects and is also considering taking equity in such third party facilities.

With regard to IOC’s earlier announced plan to take a significant stake in Gujarat State Petroleum Corporation’s Mundra LNG terminal, a move sources said has now been decided against, he said: “Let’s see. Our immediate requirement is normally capacity, and a stake has other issues also, which need to be looked into. So then it becomes an entirely different business.”

IOC is understood to have booked 1 million tpa capacity in the 5 million tpa Mundra facility in Kutch.

Booking capacity in other onshore LNG terminals is also under consideration, according to Singh.

“These are business calls, which are open. It depends on the deals that we are able to get,” he said.

The company also has upcoming floating storage and regasification projects in India being developed by the likes of H-Energy and Swan Energy on its radar screen.

“We may be taking capacities in FSRUs, depending upon the location,” he added. “However, I can’t talk about setting up our own or taking stakes in such (FSRU) projects.”

As well as recently constructing its own terminal at Ennore in Tamil Nadu and booking capacity in other facilities, IOC is building significant gas infrastructure in India. The company is a large gas consumer and is setting up city gas distribution networks either in partnership or independently.

“If you look at India today, there is a lot of expansion as far as the gas business is concerned.... Today nearly 70% of Indian population has been assigned the pipe network... the contracts have been awarded. And in a short time probably the entire country will get cover,” said Singh.

While IOC is the largest domestic refiner and retailer, the company is also involved in international upstream and liquefaction projects.

“We are operating in a couple of countries and we have, I think, 12 assets at the moment. Not very big ones, but we are operating in Russia, in Oman, we have recently acquired (acreage) in Abu Dhabi.

“We are operating in Canada in gas... and couple of exploratory assets include one we recently got in Israel,” he added.

“Normally when we are going overseas we tie up with other Indian companies, predominantly either an upstream company — Oil India, ONCG or ONGC Videsh — or other (multinational companies) who have a similar wing for upstream integration.”

He said that IOC is in the market for both oil and gas when looking for international assets.

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IOC eyeing end of 2020 for full capacity at Ennore LNG terminal