Oil and Natural Gas Corp (ONGC), IOC and Bharat Petroleum Corp Ltd (BPCL) have agreed to take one million tons per annum capacity each on the 5 million tons a year floating LNG terminal planned at Jafrabad port in Gujarat, sources privy to the negotiations said.

Gujarat State Petroleum Corp Ltd (GSPC) too is in talks to take 1.5 million tons capacity in the floating, storage and regasification unit (FSRU).

The companies hiring the capacity will bring their own LNG from abroad and pay Swan a tolling fee. Swan Energy is building the project in joint venture with Exmar of Belgium. The company had last year secured all necessary permits for the project and the state-owned firms agreed to hire 60% capacity of the terminal on tolling basis for importing their own gas will help Swan take the final investment decision and tie-up project financing.

ONGC and IOC own 12.5% stake each in Petronet LNG Ltd, which owns and operates a 10 million tons a year liquefied natural gas (LNG) import terminal at Dahej in Gujarat.

This terminal is being expanded to 15 million tons by next month. While Petronet expanded the Dahej terminal on premise of leasing out the capacity third parties, the company also has a 5 million tons a year LNG import facility at Kochi on the west coast.

Sources said Swan is targeting 2019 for commissioning of the one jetty-moored FSRU at Jafrabad. It plans to expand the capacity to 10 million tons through the deployment of a second FSRU.

Merchant’s Swan Energy Ltd holds 51% stake in Swan LNG Pvt Ltd – the company building the Jafrabad terminal. Exmar Marine holds 38% and the remaining 11% is with Gujarat State Petroleum Corporation (GSPC). Exmar is known as a pioneer in floating regasification solutions for having introduced world’s first FSRU in 2005.

GSPC is building its own LNG terminal in joint venture with Adani Group at Mundra in Gujarat by 2017. Also on the west coast is an under-utilised 5 million tons Dabhol LNG import terminal, operated by state gas utility GAIL India Ltd.