UK-based natural gas major BG Group is planning to sell liquefied natural gas volumes in India, starting in late-2008, in a bid to expand its city gas business across the country, according to Reuters.

The news source noted that BG already owns interests in oil and gas exploration and production blocks in India apart from having stakes in city gas distributors across the country.

Indian electricity generating utilities and fertilizer companies are reportedly favoring the use of natural gas over the costlier naphtha feedstock, due to the increase in oil prices, according to the Reuters report.

Reuters said that BG India is holding negotiations with Royal Dutch Shell and Petronet LNG to secure access to their liquefied natural gas (LNG) regasification terminals in India. Shell operates a 2.5 million tonnes per annum terminal in Hazira, Gujarat, while Petronet LNG owns a 6.5 million tonnes per annum facility in Dahej, Gujarat.