With the merger of British Petroleum (BP), Amoco, Arco and Burma Castrol, the new entity plans to initiate projects worth $1billion in India. BP plans to bring natural gas to India in the form of LNG and dimethyl ether (DME).

Accordingly, the company has already formed a consortium – Kakinada Indian Oil Consortium, with Indian Oil Corporation (IOC), Cocanada Port Company and Malaysian Petronas for a LNG project.

In the first phase of the project, the consortium would set up a LNG terminal, storage tanks and a regassification unit for processing 2.5 million tonnes of gas. This phase would also include a 1,000 MW power plant and a pipeline network with an estimated cost of $1 billion. The first phase is expected to achieve financial closure by the end of 2001.

In the second phase of the project, the consortium would increase the capacity of the unit to 10 million tonnes, depending on the market demand.

For the DME project too, BP has formed a consortium with IOC, Gas Authority of India and the Institute of Petroleum. BP plans to transport DME from the Middle East and offer the same as an alternative to other liquid fuels and naphtha at competitive prices. BP has already signed MoUs with seven IPPs including Vasavi, Tanvir Babi, Kannur for the supply of DME from 2005.

As part of this project, BP also plans set up a 100 km pipeline with an estimated cost of $100 million on the southern coast of India.