India to Raise Oil, Gas Imports From Nigeria.

MUMBAI—India plans to augment imports of crude oil and liquefied natural gas from Nigeria to meet increasing demand for energy, the country's oil minister said Wednesday.

India plans also to invest in Nigeria's growing natural gas industry through its state-run companies, S. Jaipal Reddy said after a meeting with Nigeria's foreign affairs minister, Henry Odien Ajumogobia, in New Delhi to discuss trade issues.

The world's second-fastest growing major economy wants to raise crude oil imports from Nigeria to 18 million metric tons a year from 2012-13 onwards, compared with 13.2 million tons in the year ended March 2010, due to significant expansions in refining capacity, Mr. Reddy said, according to an oil ministry statement.

"India is interested in tying up LNG imports from Nigeria immediately, as the country's requirement of LNG is projected to go up by 12 to 15 million tons a year in the foreseeable future," he said.

In 2009-10, India's total LNG imports were 8.91 million tons.

Asia's third-largest economy is increasing fossil fuel imports from Nigeria at a time when civil unrest in the Middle East has put oil supply from the region at risk. This has pushed countries such as India, which imports about 80% of its crude requirements, to diversify sources of fuel supply.

According to data from the Organization of the Petroleum Exporting Countries, Nigeria gets 20% of its gross domestic product from the oil sector. Oil accounts for 95% of its foreign exchange earnings and about 65% of its budgetary revenue, the OPEC data showed.

The ministry statement said Ajumogobia indicated that Nigeria LNG Ltd. is looking to dilute a stake and that Indian state-run gas utility GAIL (India) Ltd. is one of the likely contenders.

Nigeria LNG has an export capacity of 22 million tons a year. Its shareholders are Nigerian National Petroleum Corp. with a 49% stake; Shell Gas BV, a unit of Royal Dutch Shell PLC, with 25.6%; Total LNG Nigeria Ltd., a unit of Total SA, with 15%; and ENI SpA with 10.4%.

The oil ministry said that GAIL has submitted a proposal to participate in Nigeria's Gas Master Plan Project, along with other petrochemical and city gas distribution projects in Nigeria.

The master plan project is designed to open up commercial gas exploration and boost economic development in the African nation.

GAIL is also keen on taking an equity stake in Nigeria's upcoming Brass LNG and OK LNG projects "to ensure long-term sourcing of LNG" from the African nation, the ministry said.

It added that OVL Mittal Energy Ltd. is making progress with exploratory drilling and the feasibility study for a refinery in Nigeria. OVL Mittal is a joint venture of state-run Oil & Natural Gas Corp.'s overseas investment arm and Mittal Energy.

Source : online.wsj.com