Mint: HPCL Seeks Mozambique Gas for Gujarat LNG Terminal

Hindustan Petroleum Corp. Ltd (HPCL), the country’s third biggest oil refiner, is negotiating with its partners in the Mozambique gas field, operated by Anadarko Petroleum Corp., to bring natural gas to India for its upcoming liquefied natural gas (LNG) terminal in Gujarat.

The deal will not only give HPCL access to gas, which is logistically cheaper to source, it will also give the company a cost advantage in its natural gas trading business, which it started last financial year.

Natural gas extracted from oil and gas fields have to be first converted into liquid before they can be exported. Once exported, it has to be regasified before supplying to consumers. Therefore, both the source and destination countries have to set up LNG terminals.

HPCL is looking at a strong mix of long-term and spot contracts for sourcing LNG for its terminal, unlike the current trend where most buyers are locked in long-term contracts. MORE