Indian Oil Corporation ltd (IOCL) has signed a pact with the Dhamara Port Corporation Ltd (DPCL) to develop a Liquefied Natural Gas (LNG) terminal inside the port area at an investment of Rs 10,000 crore.
“A Memorandum of Understanding (MoU) has been signed between DPCL and IOCL for the development of a LNG terminal. Both the companies will soon come out with an official communique”, said a senior DPCL official.
Confirming the development, a top government official said, “IOCL is going to develop an LNG terminal at Dhamara port. The terminal will have a total capacity of 15 million tonnes per annum.”
IOCL is keen to develop the gas terminal in the eastern coast of the country as the region does not have any such terminal. The LNG terminal needs 250-300 acres of land and will be a part of DPCL's Phase-II expansion programme.
Besides, the oil behemoth plans to use the natural gas as fuel and as feed stock for its proposed oil refinery and petrochemical complex at Paradip. The refinery is expected to be commissioned by 2013.
It may be noted that IOCL authorities were in talks with DPCL officials since the second half of last year for the gas terminal. The oil marketing company was interested to sell the imported gas to industries based in and around the petrochemicals complex region.
India’s gas demand is expected to reach 381 mscmd (million standard cubic metres per day) by 2015, compared with a supply of 202.9 mscmd. India has an LNG import capacity of 13.5 million tonnes per annum (mtpa) through two terminals, accounting for about 20 per cent of the country’s gas requirements.
More From This Section
Apart from IOCL, Petronet LNG was also keen on establishment of an LNG terminal in Orissa. The gas major had identified Paradip, Dhamara and Gopalpur as probable locations for its proposed project involving an investment of Rs 5000 crore.
Situated between Haldia and Paradip, Dhamara is one of the deepest ports of India with a depth of 18 meters, which can accommodate Capesize vessels up to 180,000 DWT (dead weight tonnage). DPCL, which is a 50:50 joint venture of L&T and Tata Steel, has been awarded a concession by Orissa government to build and operate the port for a period of 30 years.
Apart from Dhamara, IOCL has also shown interest to set up LNG terminal at Ennore port in Tamil Nadu and is understood to be scouting for partners for executing this project.