The state-owned Gas Authority of India Ltd. (Gail) Monday said it plans to commission its long-delayed liquefied natural gas (LNG) import terminal at Dabhol, in Maharashtra state, by the end of March or early April.

Meanwhile, India’s Ministry of Petroleum & Natural Gas (MPNG) on Tuesday told lawmakers in the Rajya Sabha, the upper house of the country’s Parliament, it will announce a new regulatory framework for shale gas development by March 31.

Gail officials told reporters at the Asia Gas Partnership Summit in New Delhi that the company has contracted a cargo of LNG and expects it to be delivered at the Dabhol port on March 27.

The Dabhol LNG terminal is to have a capacity of 5 million metric tons per year. Gail has a 31.52% stake in the terminal’s owner, Ratnagiri Gas and Power Ltd., which took the Dabhol project over from Enron Corp. in 2005 after the latter declared bankruptcy. Gail said it mechanically completed the terminal in late 2010 and dredged a channel to the port in 2011. The company said construction of a breakwater to protect tankers from high tides in not expected to be completed before 2013 or 2014, so the terminal will only operate at 30-40% capacity.

India began importing LNG in 2004 and now ranks as the world’s sixth-largest importer. According to the U.S. Energy Information Administration (EIA), India imported 434 Bcf of LNG in 2009, nearly 65% of it from Qatar.

The EIA said India has two LNG import terminals at Dahej and Hazira, both in Gujarat state. The Dahej LNG terminal came online in January 2004, has a capacity of 6.5 million metric tons per year and is owned by Petronet LNG, a consortium of state-owned Indian companies and international investors. Meanwhile the Hazira LNG terminal came online in April 2005, has a capacity of 3.6 million metric tons per year and is owned by a joint venture of Royal Dutch Shell plc and Total SA.

Petronet is also building an LNG import terminal with 5 million metric tons per year of capacity in Kochi, which is in Kerala state (see Daily GPI, April 28, 2009). The Kochi terminal is expected to be completed in 2Q2012.

Shri Jaipal Reddy, who heads the MPNG, told the government’s press information bureau that comments from other ministries and departments still need to be incorporated into its plans for shale gas. “Therefore, the announcement [of the] shale gas policy will depend on completion of the consultation process with all the concerned authorities, including environmental safeguards required to be put in place under the regulatory regime for shale gas exploration and production,” he said.

The United States, through the U.S. Geological Survey (USGS), and India signed a memorandum of understanding (MOU) on shale gas development in November 2010, when President Obama visited the country. The MOU calls for conducting an assessment of India’s shale resources, sharing best regulatory practices and promoting sustainable domestic and foreign investment in shale development.

The USGS conducted resource assessment testing in three of India’s basins — the Cambay, Cauvery and Krishna-Godavari (KG) — in January. Meanwhile India’s national oil and gas governmental office, the Directorate General of Hydrocarbons (DGH), has tasked a private company, Central Mine Planning & Design Institute Ltd. (CMPDI), with identifying and assessing shale prospects in the Damodar and Sohagpur basins.

Schlumberger Ltd. completed India’s first shale gas well in January 2011. At the time, a company official told business news media in India that the country’s shale deposits hold more than 600 Tcf. Meanwhile a study commissioned by the EIA said India has 63 Tcf of technically recoverable shale gas resources, ranking it 15th in the world (see Daily GPI, April 7, 2011).

According to the EIA, India produced about 1.85 Tcf of natural gas during 2010, a 63% increase from 2008, earning the rank of 21st in the world in terms of production. But the country had to import 429 Bcf that year to meet demand of about 2.28 Tcf.

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