Indian firms H-Energy and Petronet LNG on Wednesday signed agreements to buy liquefied natural gas from Russian gas producer Novatek on long-term contracts as they looked to vast reserves in the Arctic for meeting energy needs of Asia’s third-largest economy.
The separate agreements envisage the possibility of Indian firms picking up stake in Novatek’s LNG export projects in the Arctic.
Mumbai-based realtor Hiranandani Group’s energy arm H-Energy signed an agreement to buy long-term liquefied natural gas (LNG) from Novatek’s Arctic projects as well as looked at investing in LNG project of the Russian firm, its CEO Darshan Hiranandani told PTI.
Also, part of the agreement is Novatek exploring possibility investing in three LNG import terminals H-Energy is building on the west and east coast of India, he said.
Separately, Novatek also signed an MoU with Petronet LNG Ltd for future natural gas cooperation.
The deals were announced hours after Prime Minister Narendra Modi arrived here on Wednesday for summit talks with Russian President Vladimir Putin.
“The MoU 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 and 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,” the Russian firm said in a statement.
Without disclosing the quantity signed, Hiranandani said the MoU locks in “substantial” quantity of LNG.
“We are very excited about the signing of the MoU,” he said, adding the MoU provides for H-Energy partnering Novatek in Arctic LNG 2.
It also provides for establishing a joint venture to market LNG and natural gas from Novatak’s portfolio to end-customers in India, Bangladesh, and other markets.
“The agreement is for bringing supplies in India and Bangladesh through H-Energy’s terminals in Jaigarh (in Maharashtra), Kakinada (in Andhra Pradesh) and Haldia (in West Bengal),” he said.
Hiranandani said the Jaigarh LNG project will be completed by end of the year and work on the other two projects will start in mid-2020.
H-Energy is laying two pipelines - one from Jaigarh to Mangalore and Kannai Chatta to Shrirampur - for transporting the imported fuel to consumers.
“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, thereby contributing to India’s commitment toward reducing its impact on climate change,” said Leonid Mikhelson, Novatek’s Chairman of the Management Board.
Novatek’s low-cost production from future Arctic LNG projects ensures competitively priced LNG supplies to most regions of the world, he said, adding India is one of the largest and fastest-growing LNG markets and will be one of the main sources of future growth in global demand for natural gas.
He said the MoUs are important steps towards entering the end-customer market in India, which “is of great interest to Novatek taking into account our strategic plans to implement new LNG projects and significantly increase our LNG production volumes”.0
