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India's largest gas importer Petronet LNG Ltd (PLL) and Gangavaram Port Ltd on Wednesday signed an agreement for development of a land based LNG terminal at the port.
The new terminal, which will be Petronet's third, will have a capacity of five million tonnes, involving an investment of Rs 4,500 crore. It is expected to be commissioned by 2016.
“The equity participation between the two partners and funding pattern are yet to be worked out.
The terminal will, however, have the provision for further expansion,” a senior official of PLL told Business Line .
Expanding capacity
This project is part of Petronet's plans to expand its capacity from the current 10 mt to 30 mt by 2020.
It is currently operating a 10 mt terminal at Dahej, with a domestic market share of 20 per cent.
The company is setting up another five-mt terminal at Kochi, which is likely to become operational in the next six months.
“In addition, we are expanding our Dahej facility by another five mt, which will be completed by 2016, taking our total capacity to 25 mt,” the official said.
It is currently getting about 7.5 mt of gas from Qatar and the balance from the spot market.
Fuel agreement
It has signed an agreement to get about 1.5 mt of gas from Gorgon in Australia for its Kochi facility and is working towards an agreement to get some fuel from Gazprom in Russia.
The LNG Terminal at Gangavaram Port will have facilities for receiving, storage and re-gasification of LNG.
At its full capacity, the terminal is expected to contribute over Rs 2,000 crore as VAT to the State Government.
Dr A.K. Balyan, Managing Director and Chief Executive Officer, PLL, and Mr D.V.S. Raju, Chairman and Managing Director, GPL, signed the term sheet in the presence of Mr Sutirtha Bhattacharya, Principal Secretary, AP Infrastructure & Investment Department.
Dr Balyan said the construction work on the terminal is expected to start within a year.
“We are eager to have our presence on the east coast and are exploring various possible options to bring gas earlier than the scheduled 2016 at Gangavaram,” he said.
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