ASIA’S regional demand for LNG is increasingly rapidly with Taiwan now moving to build more gas-fired power stations, expanding its exisitng southern LNG terminal and building a new northern LNG terminal.
Demand in other parts of Asia, including India, China, Japan and South Korea, is also growing rapidly, according to Hawaii-based analysts Fesharaki Associates Consulting & Technical Services Inc. (FACTS).
"All of this means that the era of the LNG buyer's market is coming to an end. The sellers are aware of the situation and will no longer accept the low bids of the past," FACTS said in a recent report.
India’s state-owned GAIL (India) Ltd is now finding it difficult to buy LNG at prices it finds acceptable.
GAIL, a partner in the revived Dabhol power plant project, is struggling to source the required LNG to fire the 2,184-MW facility in Maharashtra, India.
GAIL said potential suppliers of LNG were quoting high prices for the fuel.
The company has set a target price of $3.6 per million British thermal unit (MMBtu) for the LNG, but said it is being quoted 30% more by suppliers from Australia, Indonesia, Abu Dhabi, Qatar and Oman.
GAIL said that it was unwilling to pay the high prices and might not be able to source the required LNG, leaving the start-up of the project, already idle since 2001, to be delayed beyond the target January 2006 date.
The Dabhol project is now in the hands of Ratnagiri Gas & Power, a joint venture between GAIL and National Thermal Power Corp., another state-owned firm. The Maharashtra Power Development Corp will also have equity in this firm. The developments follow the exit of General Electric and Bechtel from the project, after they settled all outstanding disputes with the Indian parties.
Meanwhile China is also increasing its LNG imports. The Fujian LNG terminal, lead-developed by state-owned CNOOC Gas & Power, has closed financing.
A syndicate of Chinese banks will lend 4.152-billion yuan in long-term loans and 415.2 million yuan in stand-by funding. The lenders include the Agricultural Bank of China, China Construction Bank, China Development Bank and Industrial and Commercial Bank of China.
The terminal will have a capacity of 2.6 million million tonnes a year in its first phase, which will cost about US$726,000,000.
Construction is underway and due for completion in late 2007. A 2.4 million million tonnes per year expansion is planned to come on line in 2012. The proposed terminal has a long-term contract with BP for supplies from Indonesia’s Tangguh LNG project.
