BG plans LNG imports to expand gas distribution business in India

Mumbai: BG Group Plc of the UK plans to import liquefied natural gas (LNG) as it expands its city gas distribution business in India later this year, reports quoting BG sources in India said.

Gas distribution business in India has become lucrative with increasing use of LNG and natural gas by households and industrial consumers.

BG has stakes both in oil and gas exploration and production as well as city gas distribution business in India.

BG said production volumes from the Panna/Mukta and Tapti fields on India's west coast grew by 33 per cent in 2007, adding that total volumes have doubled since it took responsibility for technical operations on the fields in 2002.

Notable success has been achieved on the Panna field, where production increased by 25 per cent in 2007, and on Tapti, where a major new complex increased production capacity by 80 per cent, it said.

BG India plans to source LNG cargoes on spot basis from the group's projects in Egypt and Trinidad and Tobago. The company is also in talks with Royal Dutch Shell and Petronet LNG Ltd to use their LNG regasification terminals in western India.

Shell operates a 2.5 million tonne terminal at Hazira while Petronet LNG runs a 6.5 million tonne facility in Dahej, both in Gujarat. Both companies are planning to raise capacity.

Demand for natural gas in India, Asia's third-largest energy consumer, is expected to rise at a faster pace even as global demand for LNG, led by the US, China and India, is set to more than double to 400 million tonnes a year by 2015.