Petronet LNG's Dahej expansion tied down by nearby petro SEZ

Public sector Petronet LNG Ltd has no space to expand as the land surrounding its Dahej plant has been notified as a petrochemical SEZ, promoted by ONGC and Gujarat Industrial Development Corporation (GIDC).

The company has plans to set up its fifth and sixth LNG storage tanks and add another regasification facility.

"Our Dahej LNG import and regassification facility has turned into an island as the surrounding land has been notified as an SEZ," said CS Mani, director (technical), Petronet LNG.

Petronet has asked state-owned Gujarat State Petroleum Corporation to acquire land for the expansion, which will increase the Dahej terminal's capacity from 10 mtpa (million tonnes per annum) to 12.5 mtpa.

Petronet LNG's current expansion is seeing addition of two storage tanks, no 3 and 4, along with a regassification facility. This will expand the LNG storage and regassification capacity from around 7 mtpa to 10 mtpa.

On the other hand, an ONGC-GIDC venture is setting up a petrochemical complex for downstream products at a cost of Rs 13,600 crore. For this, the GIDC allotted the land surrounding the Petronet LNG complex.

Though the area was notified by the central government recently, Petronet LNG had approached the GIDC and the state government more than a year ago and requested more land for storage tanks no 5 and 6.

While the state government was pondering over the proposal, ONGC's proposal for a petrochemical complex, of which the Gujarat government is a co-promoter, was cleared by the central government. This turned the entire GIDC land surrounding the Petronet complex into an SEZ area.

According to Mani, the only way additional land can be given to Petronet LNG is by de-notifying the SEZ, which is obviously a long process because of the involvement of a number of government agencies.

Unfortunately for Petronet, another nearby piece of land available with the Adani group as part of proposed solid cargo port has also been notified as an SEZ.