Oil India (OIL) is planning to set up a mobile mini-LNG terminal at a

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cost of Rs 100 crore. The company will float tenders next month for construction and commissioning of the terminal, an OIL official said.

The first-of-its kind terminal in the country would allow the facility to be moved to a new site once the associated gas is over at a particular field. The technology is already in use in the United States, China and Japan, the official said.

The LNG terminal will help OIL convert ‘associated natural gas’ found in oil fields, which is flared, to LNG. The total capacity of the terminal will be 80,000-1,00,000 standard cubic metres of gas per day. According to rough estimates, OIL flares up nearly 60,000-70,000 standard cubic metres of gas every day.

LNG is natural gas chilled to liquid form, reducing its original volume at minus 161 degree Celsius for easy transportation by different means from destinations not connected by pipeline network.

“We will float tenders for erection and commissioning of the mini LNG terminal next month. This will be a new technology and we want to reduce the amount of associated gas that is flared up,” the official said. Although, the terminal will be owned by OIL, its commissioning, maintenance and operation will be outsourced. The project will cost close to Rs 100 crore and is expected to be operational by 2012, the official said, adding that the terminal will be first set up in Assam.

The plan for a mobile LNG terminal has been made keeping in mind two motives, said the official. First, it will help utilise the gas commercially that is otherwise flared and second, it will help OIL earn carbon credit points. Carbon credit point is the new-age currency, where one carbon credit point is equal to one tonne of carbon dioxide and is called a carbon dioxide equivalent (CO2e). These points can be traded in the international market at their existing price. Points are awarded to countries or companies, which are successful in reducing their green house gas emissions.

At present, India imports LNG to meet its demands. Petronet LNG (PLL) signed a contract with Ras Gas of Qatar in 1999 for import of 7.5 million metric tonnes (mmtpa) of LNG for a period of 25 years. It is also looking at importing 2.5 mmtpa LNG from Gorgon in Australia. India is also in discussion with Iran for import of 5 mmtpa of LNG.

Asia may add as much as 15 million tonnes a year of LNG import capacity to meet increased demand, with China accounting for half of that, Vienna-based JBC Energy said in a recent report. A spot LNG cargo weighs 55,000 - 65,000 tonnes.