KOCHI: It seems merchant or tolling terminal model is evolving as new business model for Liquefied Natural Gas (LNG) segment in the country, which was hitherto unseen in India.
Soon after the leasing out of part capacity of the Kochi terminal by Petronet LNG, H-Energy Gateway Pvt Ltd (HEGPL) has announced the setting up of first merchant terminal at Jaigadh Port in Ratnagiri district in Maharashtra.
Shifting from the model of import, storage and supply of LNG, the merchant or tolling terminal model offers import and storage facilities to third parties.
India’s West Coast already has four LNG import terminals at Dahej, Hazira (Gujarat), Dabhol (Maharashtra) and Kochi (Kerala). But none of them are merchant LNG terminals. Petronet LNG has sought the model first at Kochi due to the non-completion of pipelines in Kerala, Karnataka and Andhra Pradesh.
Experts in the field point out that the merchant LNG terminal model may take deep roots in the future as an alternative to garner more revenue. At present, there are about 10 new LNG projects in the pipeline in the country, it is learnt.
“As of now the merchant or tolling terminal model was unexplored in the LNG sector in the country. When many players, both from the public and private sectors, come forward to set up new terminals, the new model is likely to find takers in the future. In Kochi, Petronet was forced to take the leasing out route due to the deepening crisis. Now Hiranandani Group has already announced that its new LNG terminal is going to be a merchant one. If these are any indications this model is here to stay in India,” said M P Sukumaran Nair, Director, Centre for Green Technology and Management and an LNG expert.
The merchant LNG terminal would offer 100 per cent regasification capacity to gas importers and end users like power plants, fertiliser units, oil refineries and steel plants. The gas users will arrange for LNG from overseas and use the terminal to unload and transfer it to trunk pipelines
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