Pipeline Construction Stalls Startup of Indian LNG Terminal

(Reuters) — India's Hindustan Petroleum Corp. Ltd. has received six or seven bids from industries to lease a part of its Chhara LNG import terminal on the west coast, the LNG unit's chief executive said on Monday.

HPCL aims to commission the terminal, with a planned capacity of 5 million metric tons per year (tpy) in the December quarter, K Sreenivasa Rao told reporters at an event.

"We have received six or seven bids, and in the next three months, we should be able to decide on the award," Rao said.

HPCL was looking to lease capacity of 3 million tpy to other companies for a period of more than 10 years, he added.

The terminal was completed in March, but its commissioning has been delayed as a 40-km (25-mile) pipeline link to an existing network meant for sales to consumers is not yet ready, Rao said.

"We hope the 40-km pipeline should be ready very soon."

The terminal will run at about 30% of capacity in 2024 to reach full capacity in four or five years, he said, adding that HPCL has also made provision to double capacity to 10 million tpy in future.

India is beefing up its gas infrastructure as Prime Minister Narendra Modi targets an increase in the share of natural gas in its energy mix to 15% by 2030 from about 6.5% now.

India's gas demand is picking up now, as prices have softened, Rao said, following a spike that had damped demand.

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