New Delhi: State gas utility GAIL India will import a shipload of LNG from Qatar in January to meet the increasing energy demand this winter season.
GAIL has signed a contract with RasGas of Qatar to import a cargo of liquefied natural gas (LNG) this month, according to a source. (LNG is natural gas cooled to -162 degrees Celsius to temporarily convert it into a liquid form, to make it easier to transport over long distances by cryogenic ships.)
"The company is trying to get more cargos, but for now it is importing one cargo from Qatar," the source said. But he could not say at what price the gas was contracted. GAIL will receive the Qatar cargo at Petronet LNG's terminal at Dahej in Gujarat.
This year, the winter has been colder than in previous years, across the country, which has led to higher power load. Gas-fired power plants have requisitioned for more fuel and GAIL is importing the cargo to meet the demand.
According to the source, the state-owned firm will in February get the first cargo in a three-year deal with Japanese trading house Marubeni. In October last year, GAIL signed a three-year deal with Marubeni to buy 0.5 million tonnes of LNG beginning in 2011. "Marubeni will supply GAIL eight cargos of LNG every year for three years. In all probability, two cargos per quarter will be supplied," the source said.
Besides Dahej, the Marubeni cargos may also go to the 5 million-tonnes-a-year Dabhol terminal in Maharashtra which is nearing completion.
Marubeni will sell LNG to GAIL at 9.75% of the prevailing Brent crude oil price plus $1 per million British thermal unit. At Brent price of $92 a barrel, the Marubeni LNG will cost $9.97 per mmBtu. After adding import duty, the cost of converting LNG to its original gaseous state (regassifying), transportation charges and local levies, the Marubeni gas would cost customers close to $13 per mmBtu.
While GAIL is an equal promoter of Petronet LNG along with Indian Oil Corporation (IOC), Oil and Natural Gas Corporation (ONGC) and Bharat Petroleum Corporation (BPCL). It along with NTPC owns the Dabhol LNG plant. The source said GAIL and NTPC plan to commission the Dabhol plant in the first quarter of 2011. Initially, the plant will operate at 20%-30% capacity as the breakwater is not fully constructed.
Petronet imports 7.5 million tonnes per annum of LNG from RasGas under a long-term contract.
New Delhi: More than six million people will directly benefit from a new agreement for the World Bank to provide $1.5 billion in funding to expand India's rural roads program, the largest rural roads project the bank has ever approved.
World Bank group president, Robert B Zoellick and India's finance minister Pranab Mukherjee were present at the signing of the deal to supplement the Pradhan Mantri Gram Sadak Yojana (PMGSY) or the Prime Ministers Rural Roads Program.
The funding will be used to build more than 24,000 kilometres of all-weather roads in the states of Himachal Pradesh, Jharkhand, Meghalaya, Punjab, Rajasthan, Uttarakhand and Uttar Pradesh and any other state, which may join the program at a later date over the next five years. The construction and maintenance of these roads will create an estimated 300 million person-days of employment for the rural people. More than 20,000 engineers as well as many contractors and skilled and unskilled workforce will be trained in modern rural road engineering practices and business procedures.
Speaking on the occasion, finance minister Pranab Mukherjee said, "Government of India launched PMGSY in the year 2000-a time when almost 41% habitations did not have access to all-weather roads and a large part of the road network was in poor condition. Today, the PMGSY program has added about 300,000 km of new and improved rural roads connecting over 73,000 habitations, yet some parts of the country, especially in the economically weaker and hilly states still remain inaccessible. Under the overall PMGSY program, some 375,000 km of new roads are being constructed and another 372,000 km improved at an estimated cost of about $40 billion. The World Bank is supplementing our efforts in providing all-weather connectivity.
Delivering much needed infrastructure will help India in its drive to ensure all people have opportunity, said Mr Zoellick. "Roads are an essential lifeline-vital not only to boost people's incomes by providing greater access to markets, but also to help raise education standards, as teachers and children have the means to get to school, no matter what the weather. These roads will not only connect people to markets and services but also create jobs in rural areas."
"The World Bank is pleased to work with the government of India as it ramps up the pace and quality of work under this important national program," he said.
The agreement was signed by Venu Rajamony, joint secretary, department of economic affairs, ministry of finance, on behalf of the government of India, and Roberto Zagha, country director, India on behalf of the World Bank.
The World Bank experience in funding rural roads programs globally will be used to enhance the effectiveness of India's program by improving its overall systems and policy framework, with a greater focus on achieving results. The World Bank project also includes $60 million in technical assistance to build the capacity of the rural roads agencies, especially in the ongoing management of assets and the sustainable maintenance of roads.
Over the next five years, the project, along with government of India funds, will enable participating states achieve 91% connectivity, by building the roads and improving the links of the existing network. A system will be developed for maintaining these roads in good condition over the long term.
The project will be financed from two World Bank institutions-the International Development Association (IDA), the bank's fund for the poorest countries, and by the International Bank for Reconstruction and Development (IBRD), which supports credit-worthy developing countries. The IDA credit is on both regular and hard terms. While IDA on regular terms provides interest-free loans with 35 years to maturity and a 10-year grace period, the latter attracts a 3.2% interest rate with the same years of maturity and grace period. The IBRD loan has a 5-year grace period, and a maturity of 18 years.
New Delhi: The World Bank says India's economic growth would overtake China's growth, on purchasing power parity (PPP) basis, by 2012, but New Delhi has played down the projection by the multi-lateral agency, saying the country is not in a race with anyone.
In its latest report on Global Economic Prospects, the World Bank has projected the Indian economy will grow by 8.7% in 2012, faster than 8.4% expected for China. But these projections are based on PPP basis, which means that purchasing power of currencies are taken into account to measure economic growth. As such, this is not the traditional way of measuring economic growth.
Reacting to the World Bank projections, finance minister Pranab Mukherjee said, "India is trying (to achieve a high growth rate), but I am not going to compete with anybody." He said every country is trying hard to overcome the economic crisis and reach a desired level of growth. "Nothing wrong in it," he said.
Mr Mukherjee said India wants to record double-digit growth with moderate inflation and fiscal prudent policies. "We want to reach double-digit growth, at the same time have a modest rate of inflation without indulging in fiscal profligacy; that means with prudent fiscal management."
Indian and Chinese economies are not comparable. The size of the Indian economy is $1.3 trillion and the Chinese economy is estimated at $5.5 trillion.