The Rs 4,500-crore integrated liquefied natural gas (LNG) terminal at Katupalli near Chennai will come up by December 2015.
Indian Oil Corporation is constructing the integrated terminal which will use Ennore port for its LNG handling. The oil major is likely to start awarding contracts in three months, the company's Chairman, Mr R.S. Butola, said.
Southern India does not have adequate supply of piped gas and the project will address this gap, he told newspersons.
IOC today signed an agreement with Tamil Nadu Industrial Development Corporation for the project, which will come up in 132 acres.
Mr Butola and Mr N. Sundardevan, Tamil Nadu's Industry Secretary, signed the agreement in the presence of State Chief Minister, Ms J. Jayalalithaa. She had earlier released the State's Vision 2023 document.
Funding
Mr Butola said Tidco could take a 5-10 per cent equity stake in the project. The mode of funding the project cost through a ratio of debt to equity is being worked out. “We have got some fiscal incentives from the state government for the project,” he said.
IOC will import LNG from various sources, Mr Butola said without going in to details. The LNG terminal's capacity at the port will be to handle 5 million tonnes a year.
The LNG project at Ennore Port had been under consideration at least for over a decade, initially by Tidco as part of their Petrochem Park project and later by Ennore Port Ltd . However, the project did not take off.
Four years ago, EPL accorded ‘in-principle' approval to IOC to put up the terminal on a joint venture basis but no concrete action has yet occurred, says the business plan prepared for the Ennore port.