NEW DELHI: INDIAN oil and gas firms Petronet LNG and H-Energy have both signed agreements with Russian gas producer Novatek, under which they will buy substantial quantities of liquefied natural gas (LNG) on long-term contracts. The agreements also open up the possibility of both Indian firms investing in the Russian firm’s LNG projects.
Both Memorandums of Understanding (MoU) lay down similar goals, according to separate statements from the companies concerned. Novatek’s agreement with Petronet “envisages delivering LNG supplies from Novatek’s portfolio to the Indian market, including natural gas supplies for power generation, as well as investment by Petronet LNG in Novatek’s future LNG projects”. The agreement says the companies will cooperate in the joint marketing of LNG as motor fuel in India, including joint investment in developing a network of filling stations and a fleet of LNG-fuelled trucks.
While Novatek’s agreement with H-Energy also covers LNG supply to India and joint investments in both Novatek and H-Energy projects, the companies will also establish “a joint venture to market LNG and natural gas from Novatek’s portfolio to end customers in India, Bangladesh and other markets”.
“India’s rapid economic growth requires increasing demand for all sources of energy and, primarily, for natural gas as the most environmentally friendly type of fuel. Moreover, the conversion of modal transport to LNG enables India to significantly reduce carbon emissions..,” noted Leonid Mikhelson, Chairman of the Management Board, Novatek.
According to Darshan Hiranandani, CEO of H-Energy, it will bring LNG from Novatek’s Arctic LNG 2 project to downstream customers in India and Bangladesh through its terminals in Jaigarh, Kakinada, Haldia and its two pipelines, Jaigarh to Mangalore, and Kannai Chatta to Shrirampur. Work on the Jaigarh LNG project is expected to be completed by the end of the year, while work on the other two projects will start in mid-2020.