India’s Petronet LNG is set to partner with ONGC Videsh to acquire a 5% stake in Qatar Petroleum’s planned liquefied natural gas expansion project along with related upstream gas development.
Under the expansion plan, Qatar Petroleum intends to increase LNG production capacity from 77 million tonnes a year to 100 million tonnes, according to the Press Trust of India (PTI).
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Earlier this year, the state-owned company completed the merger of its two LNG producing subsidiaries Qatargas and RasGas.
Qatar Petroleum intends to form a partnership with other oil and gas firms to deliver the North Field expansion.
Petronet LNG managing director and CEO Prabhat Singh was quoted by the news agency as saying: “We had meetings with them and they have asked us to give a business proposal.”
The company has a contract to purchase 7.5 million tonnes of LNG per year from RasGas for a period of 25 years.
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By GlobalDataUnder the contract, RasGas agreed to offer a 5% stake to Petronet or its nominee in the liquefication plant in the Gulf nation.
Petronet nominated ONGC to purchase the equity.
However, the company elected not to make the $135m payment, which now escalated to $2bn.
Petronet’s interest to buy a stake in both the upstream development and LNG production facility is attributed to its plan to own gas molecule at the well-head.
The acquisition of the stake is expected to enable the company to have improved understanding of the business of converting natural gas extracted from under-sea fields into a liquid at sub-zero temperature, shipped and marketed across the globe.
