Indian Firms Choose Small-Scale LNG Units to Boost Gas Supply.

Small-scale Liquefied Natural Gas (SSLNG) units are emerging as a significant innovation in India’s energy sector. With gas becoming the preferred fuel, public sector entities are setting up SSLNG units to ease the transition.

Earlier this year, GAIL (India) announced its SSLNG project, and recently, public sector giants ONGC and IndianOil have partnered to establish a unit. This technology aims to connect isolated sources and consumers not yet linked to the natural gas pipeline network, offering a cost-effective solution.

In March, GAIL began setting up India’s first SSLNG unit at its Vijaipur LPG plant in Madhya Pradesh. In June, ONGC and IndianOil entered a strategic partnership to establish an LNG plant near ONGC’s Hatta Gas Field. The non-binding MoU for a Technology Demonstration of a SSLNG plant at Hatta, if successful, may lead to similar projects in other areas.

An official statement from ONGC said, “ONGC and IndianOil have signed a memorandum of understanding (MoU) to establish a small-scale Liquefied Natural Gas plant near the Hatta Gas Field in the Vindhyan Basin. The establishment of the Hatta LNG plant will significantly enhance the Vindhyan Basin’s status, upgrading it from a Category II to a Category I Basin.”

The Hatta gas field is located in Batiyagarh tehsil of Damoh district in Madhya Pradesh, approximately 45 km from Damoh town.

According to official sources, the initial LNG plant capacity is planned for 32 to 35 tonnes, with 45,000 SCMD gas, as per the MoU. “The plant capacity may be increased later after peak production. The LNG plant will cater only to Hatta Field,” the official said.

IndianOil is conducting a Detailed Feasibility Report (DFR) study of the block. “The cost of the Small Scale LNG plant will be borne by IndianOil. ONGC will sell gas to IndianOil. The LNG plant will be operated and managed by IndianOil, and further sale of LNG to consumers will be handled by them.”

The unit is expected to be commissioned within 15 to 18 months after approval of the Field Development Plan or signing of sale agreements.

Addressing why the unit is being set up when gas could be transported directly, the official explained, “There are no major industries in the vicinity. Secondly, gas pipelines are approximately 300 km away. Long distance transportation through pipelines will adversely impact our economics and requires PNGRB compliance. Being an unconventional and tight reservoir, cascading is not recommended. Additionally, Modular LNG is a novel concept.”

The official clarified that there will not be any re-gasification facility at Hatta but will use liquefaction technology to serve off-grid customers. “The LNG plant shall be maintained and operated by IndianOil. ONGC will just sell gas on an 'as is where is basis.'”

Another source stated, “The MoU aims to monetize stranded gas fields by establishing SSLNG plants, converting natural gas into LNG and supplying to customers by LNG road tankers. The Vindhyan basin field in Madhya Pradesh has been identified for the pilot project. ONGC has submitted the development plan for this field to the Directorate-General of Hydrocarbons for final approval, while IndianOil has also completed the feasibility study of the project.”

ONGC has shared a list of many small fields, possessing more than 100 stranded small gas fields where laying long pipelines is not viable and the gas has been flared or untapped for many years. To monetize these fields, IndianOil brings in expertise through small-scale LNG.

HBL