01-06-08 ONGC, which has been trying to tie up Liquefied Natural Gas (LNG) contracts for its proposed Mangalore LNG terminal, is hopeful of getting gas from its overseas investment arm ONGC Videsh Ltd’s (OVL) Farsi block in Iran.
The company has been trying to secure LNG supplies before building a terminal with a capacity of 5 mm tpy to be expanded to 10 mm tpy at Mangalore.

Direct/indirect route
OVL and its partners -- Indian Oil Corporation and Oil India Ltd -- have struck gas in their Iran asset, which is estimated to have huge gas reserves. In the asset, OVL is the operator with 40 % stake, IOC owns 40 %, and the rest is held by Oil India. The block also has oil.
The field is expected to start producing in the next three years, and efforts are on to bring the gas either directly or indirectly to India, a senior ONGC official told. By indirect route, it is meant that the company may swap this gas with some other gas.
“Meanwhile, we are also looking at Oman and Australia for securing LNG for the proposed terminal. The fate of the project depends on how soon we are able to contract for gas.” He did not rule out the possibility of teaming up with Petronet LNG Ltd for tying up contracts.

ONGC’s earlier attempts to seek supply from Qatar and Egypt have so far met with little success. Besides, attempts to source ONGC’s share of natural gas from the Sakhalin-I oil fields in Russia in LNG form have also not materialised so far.
There is also an understanding with the Hindujas is for sourcing LNG. ONGC plans to feed the Mangalore LNG terminal with the gas it gets in return for the proposed investment in the development of other Iranian gas fields with the Hindujas.

SEZ project
Meanwhile, ONGC is going ahead with its other projects in Mangalore special economic zone. Mangalore SEZ, a special purpose vehicle, was incorporated in 2006 to develop the SEZ. ONGC is the anchor co-promoter. The other equity-holders are the Government of Karnataka, the Kanara Chamber of Commerce and Industry and Infrastructure Leasing and Financial Services.
The total investment envisaged for development of various projects by ONGC and its subsidiary Mangalore Refinery & Petrochemicals in the SEZ is around Rs 35,000 crore. The main projects that would be developed in this SEZ are: a petrochemical complex, an LNG regasification plant, C2-C3 extraction from this regasified LNG, a power plant to cater to the power requirement of all units in the SEZ and general industry, trade, banking, telecommunications and allied services for supporting the activities of the units in the SEZ.