Petronet LNG, India’s biggest liquefied natural gas (LNG) importer, on Wednesday signed an agreement to invest Rs 4,500 crore in building a five-million-tonne import terminal at Gangavaram Port on the Andhra coast. This will be the country’s fifth LNG terminal after Dahej, Dahbol, Hazira and Kochi.
Gangavaram will be Petronet's third LNG import terminal. The company, at present, operates a 10-million tonne facility at Dahej in Gujarat and is building another five-million tonne terminal at Kochi in Kerala, to be ready by the year-end. A steep decline in domestic gas output, led by declining volumes from Reliance Industries-operated KG-D6 field, has made LNG imports an attractive business.
“Petronet LNG and Gangavaram Port Ltd (GPL) on Wednesday signed a firm and binding term sheet for developing a land-based LNG terminal at Gangavaram Port, Andhra Pradesh with a capacity of five-million tonne per annum,” the two firms said in a joint press statement.
The term sheet was signed by Petronet managing director and chief executive A K Balyan and Gangavaram Port Ltd (GPL) chairman and Managing director D V S Raju. The LNG terminal at Gangavaram Port will comprise facilities for receiving, storage and regasification of LNG and would be built in 42 months. “The terminal at Gangavaram Port would have the provision for further expansion, like the flagship Dahej LNG Terminal of Petronet,” it said. The company would import LNG from gas-rich nations like Australia to meet the growing energy demand in Andhra Pradesh and other eastern and central part of India.
“The construction work on the terminal is expected to start within a year and it should be ready to commence operations by 2016,” Balyan said.
“We are eager to have our presence on the east coast and are exploring various possible options to bring gas earlier than 2016 at Gangavaram Port.”
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Gas imported at the terminal would provide feedstock to refineries, power and fertiliser plants.
The time of arrival of LNG at Gangavaram port is likely to be advanced as the company is looking at integrating various other facilities with the project, Balyan told Business Standard.
GPL would be holding seven-eight per cent equity in the project towards the land provided to set up the terminal, according to Petronet chief. On the likely source of LNG to be imported to this facility, he said there had been several sources on the company's radar and it has enough time to finalise the same.