Indian Oil Corporation (IOC) has decided to commission a detailed feasibility report (DFR) on a 2.5-million tonne a year liquefied natural gas (LNG) import terminal at Ennore, on the outskirts of Chennai. The company is also exploring the possibility of setting up a power plant with the terminal.
The company is scouting for partners for the project and is likely to approach NTPC, Tamil Nadu Electricity Board and Larsen & Toubro, besides Petronet LNG, a pioneer in this business.
“We took a decision last week to get the DFR prepared. It will cost Rs 3-4 crore and we will need to take board approval for going ahead,” said B M Bansal, director (business development), at IOC. After the award of a contract for the report, it will take at least six to nine months to be completed. On the partnerships, Bansal said the company was yet to formally approach these companies.
In 2007, IOC had put on hold plans to set up the LNG import-cum-regasification terminal and a 1,000-Mw power plant, after huge gas finds off the east coast made the project economically unviable. Even though Reliance Industries Ltd (RIL) has added about 60 million standard cubic metres a day of gas to Indian production from its discovery in the Krishna Godavari basin, IOC now sees enough demand for gas in the eastern region.
With IOC deciding to revisit its decision on the Ennore LNG terminal, it will become the first company to put up such a facility on the east coast. The country has two commissioned LNG terminals, one at Dahej, operated by Petronet, and at Hazira, operated by Shell. Two more LNG terminals are coming up on the west coast, at Petronet’s Kochi terminal and Ratnagiri Gas & Power Pvt Ltd’s Dabhol terminal.
IOC is also looking at the possibility of long-term LNG imports, following recent discussions between India and Qatar on LNG supplies of five million tonnes annually. “We are also talking to LNG suppliers in countries like Australia,” Bansal added.
The company had booked land with Ennore Port for the terminal. “We will now take action for land procurement or request the Ennore Port to make the land available to IOC,” he said.
