 "Indian Oil and Gail ink MoU to buy stake in Dhamra LNG terminal")
Two major events - Indian Oil and Gail agreeing to pick up stakes in Dhamra LNG terminal and central government extending capital grant to a natural gas pipeline project in the Eastern region – have the potential to fastened gas-based economic growth of the region. These two projects are expected pump in investments worth about Rs 51,000 crores in Eastern India economy.
Yesterday, Indian Oil Corporation Limited and Gail India Limited signed an MoU with Dhamra LNG Terminal Private Limited (DLTPL), promoted by Adani Group, to buy stakes in the 5 MMTPA capacity LNG receiving, storage and regasification terminal, being put up at Dhamra Port, Odisha.
As per the MoU, Indian Oil and Gail will hold 39 percent and 11 percent stake respectively in DLTPL, with the balance 50 percent owned by Adani group.
Going forward, Indian Oil and Adani group will each divest 1 percent of their respective stake to a credible financial institution which will then have 2 percent stake in the terminal. Apart from equity, Indian Oil and Gail intend to book regasification capacity of 3.0 and 1.5 million metric tonnes per annum (MMTPA) respectively in the terminal.
The development comes in the backdrop of Government’s consistent focus on undertaking welfare and growth measures in eastern India so as to bring this hitherto underdeveloped region into the economic mainstream of the country.
Also Read
Presently, the states in eastern India - Odisha, Bihar, Jharkhand and West Bengal - are unable to receive the benefits of natural gas in sectors like domestic, transport, industries etc, as the region does not have gas infrastructure by way of LNG terminals and cross-country gas pipeline grid. The LNG terminal at Dhamra will provide the potential customers in these states a clean and economically viable alternative which will also help in reducing the carbon footprint. In addition, it will provide momentum to the economic growth of this region by attracting new industrial projects.
Besides, the LNG terminal will meet the gas requirements of three oil refineries of Indian Oil situated in Barauni, Haldia and Paradip. The three fertilisers plants at Barauni, Sindri and Gorakhpur which are being revived by the central government will also benefit from this terminal. There are also plans to supply natural gas from the terminal to various city gas distribution networks coming up in eastern India, which in turn would cater to the requirements of piped gas for households, CNG for automobiles and clean fuel requirements of commercial establishments and industries. It is, therefore, expected that once operational, Dhamra LNG terminal will emerge as a bridge to prosperity for the entire eastern India.
Meanwhile, in another historic development yesterday, Cabinet Committee on Economic Affairs (CCEA) approved capital grant of 40 percent, amounting to Rs 5,176 crores over 5 years, for Jagdishpur-Haldia and Bokaro-Dhamra Pipeline (JHBDPL) project, which is being implemented by Gail India Limited at a total capital outlay of Rs 12,940 crores. This is the first time ever that Government of India has extended capital grant to a natural gas pipeline project.
The 2,539 km long JHBDPL is expected to be completed by December 2020 and will connect UP, Bihar, Jharkhand, West Bengal and Odisha. The project will also see city gas distribution (CGD) networks being set up by Gail in 7 important towns in eastern India, namely, Varanasi, Patna, Ranchi, Jamshedpur, Kolkata, Bhubaneshwar and Cuttack. The JHBDPL gas pipeline will be used for gas supply to 3 fertiliser plants in eastern India, namely Barauni, Sindri and Gorakhpur.
The Dhamra LNG Terminal project and JHBDPL project, cumulatively, are expected to bring investments to the tune of Rs 51,000 crore into the economy of eastern India. Of this, about Rs 13,000 crores will be spent on JHBDPL pipeline infrastructure; Rs 6,000 crores on CGD projects in 7 cities; Rs 6,000 crores on Dhamra LNG terminal and Rs 26,000 crores on revival of Gorakhpur, Barauni, Sindri & Talcher fertiliser units.
