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The government is working on a policy for setting up floating storage and regasification unit (FSRU)-based liquefied natural gas (LNG) import terminal at major ports in the country, a top Shipping Ministry official said.
The policy will spell out how such deals will be structured.
“An FSRU is just taking some waterfront to set up the LNG import facility,” Shipping Secretary Gopal Krishna told BusinessLine . “It should be taken as land lease nothing else. Earlier, we were thinking it’s a public private partnership (PPP). It’s not a PPP; it’s a pure land lease,” he added. In many countries, FSRU-based LNG project is the fastest and most cost-effective way to secure energy supply while bolstering the fight against climate change and air pollution. FSRU-based LNG projects costs half that of an on-shore import terminal.
An FSRU is a Liquefied Natural Gas (LNG) storage ship that has an onboard regasification plant capable of turning LNG back into a gaseous state and then supplying it directly into the gas network.
The Government is seeking to raise the share of natural gas in the primary energy basket to 15 per cent from current 6 per cent over the next few years. This could lead to a six-times growth in the Indian gas market by 2030 from the current levels, with LNG to be the largest contributor.
LNG import terminal capacity is expected to double to 47.5 million tonnes (mt) by 2022.
FSRU-based LNG projects have been set up or are in the process of being developed at ports outside the control of the Central government.
H-Energy Gateway Private Ltd (H-Energy), the energy unit of India’s real estate firm Hiranandani Group, has opened an FSRU-based LNG import terminal at Jaigarh port in Maharashtra. H-Energy is also building a FSRU LNG project in West Bengal.
Swan LNG Private Ltd is setting up an FSRU-based LNG import facility off the Jafrabad coast in Gujarat’s Amreli district.
Two FSRU-based LNG import terminals are planned on the east coast — on each at Kakinada and Krishnapatnam ports, both in Andhra Pradesh.
Centre-owned Mumbai Port Trust had floated a tender to set up a FSRU-based LNG project, but the tender was scrapped in the absence of a policy framework to award the tender.
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