Petronet LNG Ltd. is about to embark on a fund-raising campaign to gather funds that will support the expansion plans on its Dahej liquefied natural gas ( LNG ) terminal in the state of Gujarat.
Businessweek reported that the Indian LNG importer has allotted $600 million as capital expenditure funds for the modernisation project, of which majority, or $400 million, will be raised through debt, while the remaining $200 million may be sourced from the terminal's expected users.
"We are in discussions with users for the expansion and we may not need to spend any of our own money on it," said R.K. Garg, Petronet LNG Ltd.'s Finance Director. "The fund-raising plans should be finalised in about six months. It will probably be a mix of local and overseas debt."
Mr Garg said the expanded terminal's potential users include GAIL India Ltd. and Gujarat State Petroleum Corp.
Indian companies have been constructing LNG import terminals to support domestic growth demand for the cleaner burning fuel. Recently, India, along with fellow emerging economy China, committed to cooperate toward an international treaty that would limit fossil-fuel emissions not only of industrialised nations but also emerging economies like them as well.
Petronet LNG Ltd. earlier signed a preliminary agreement to purchase 2.5 million metric tonnes annually of LNG from OAO Gazprom for 25 years. GAIL, meanwhile, will purchase from Cheniere Energy Partners LP a total of 3.5 million tonnes for 20 years.
The Dahej LNG terminal is due for completion by December 2015.