Gujarat Petro raises LNG unit capacity
Gujarat State Petroleum Corp. (GSPC) has raised the capacity of its planned liquefied natural gas (LNG) terminal by 30% to 6.5 million tonnes (mt) a year after a slump in prices of metals used in construction.
GSPC plans to have the plant ready by 2013 at a cost of Rs3,000-3,500 crore, and the sharp falls in prices of metals such as steel and nickel have allowed it to think bigger.
GSPC will hold 50% stake in the project, while Ahmedabad-based Adani Group will take 25%. The remaining might be sold to some financial institutions or state refiners. Prices of nickel, which is mainly used in producing stainless steel, have plummeted by at least 60% this year as output cuts from producers have failed to keep up with falling demand.
Steel prices and demand have also fallen sharply in the face of a global downturn, which has forced producers to instigate production cutbacks and slash jobs. India is encouraging the use of natural gas with new supplies due to come online soon as it looks to control its oil import bill.
But falling prices of naphtha have attracted some gas clients, such as power generation firms. Despite the price attraction of cheaper naphtha, gas demand in India is still running far ahead of supplies totalling about 95mscmd.