Regional LNG: India Petronet to expand LNG terminal capacity: Report

Petronet LNG Ltd. plans to more than double the capacity of its liquefied natural gas (LNG) terminal in western India to 12.5 million tons by 2008 from 5 million currently, a company source told Reuters on Wednesday.

Petronet, which made its stock market debut last year, was launched by the Indian government to import LNG to meet the energy needs of a booming economy, and to build the terminals.

Earlier this year, the firm said it would raise its capacity at the Dahej terminal in Gujarat to 10 million tons a year, by building two new LNG storage tanks.

The additional capacity will raise Petronet's planned investment by 4 billion rupees to 17 billion ($386.4 million), a Petronet source, who did not wish to be identified, said.

India's state-run firms Oil and Natural Gas Corp. Ltd. , Indian Oil Corp. Ltd. , Bharat Petroleum Corp. Ltd. and GAIL (India) Ltd. together own 50 percent of Petronet.

Gaz de France has a 10 percent stake, with the remaining 40 percent held by public and institutional investors.

Petronet's board will meet on Thursday to approve a $52 million contract to be awarded to a consortium led by Japan's Ishikawajima-Harima Heavy Ind. Co. Ltd. to construct its third LNG storage tank in Dahej, the source said.

"The tender for building our fourth tank will be out within two months, thus completing our Dahej expansion plans," the official said.

The IHI-led consortium, which had built Petronet's previous two tanks, is expected to bid for the fourth tank contract as well.

Other members of the consortium include Japanese firms such as Toyo Engineering Corp. , Itochu Corp. , Mitsui & Co. Ltd. and Ballast Nedam International B.V., a subsidiary of Dutch construction company Ballast Nedam N.V. .

Petronet's shares were up 8.2 percent at 56.05 rupees in the afternoon, while the main index was up 0.7 percent. ($1 = 44 Indian rupees) (*)