State-owned Hindustan Petroleum Corp Ltd (HPCL) and Mumbai-based infrastructure major Shapoorji Pallonji plan to set up a terminal for import of liquid gas (LNG) on Gujarat coast at a cost of Rs 5,000 crore.

HPCL and SP Ports Pvt Ltd, a unit of Shapoorji Pallonji Group, plan to set up the liquefied natural gas (LNG) import terminal at Chhara in Gujarat’s Junagadh district through a 50-50 joint venture, sources privy to the development said.

SP Ports is already developing a greenfield, all weather, direct berthing port in Junagadh district. HPCL and SP Ports are carrying out a detailed feasibility study for establishing technical and commercial viability of setting up an LNG import and regasification terminal of 5 million tonnes per annum capacity at the proposed Port, the sources said.

The port is connected to a gas pipeline grid and evacuation of the fuel would not be an issue, they said.

Gujarat already has two functional ports at Dahej and Hazira. A third one is being planned by Gujarat State Petroleum Corp (GSPC) and Larsen & Toubro (L&T) at Mundra. The Chhara terminal would be the fourth in the state.

The sources said the Chhara import terminal may take a minimum of three years to build.

India has three operational LNG import facilities — a 10 million tonnes unit at Dahej operated by Petronet LNG Ltd (PLL); a 3.6 million tonnes terminal of Shell-Total at Hazira in Gujarat, and a newly commissioned 5 million tonnes facility at Dahbol in Maharashtra.

A similar capacity import facility will come up at Kochi in Kerala this year.

Currently, both PLL’s terminal at Dahej, and Shell-Total’s terminal at Hazira in Gujarat are under expansion to 15 million tonnes and 5 million tonnes capacity, respectively.

Even Dabhol is proposed to be expanded to 10 million tonnes.

Also, GAIL and Shell are putting up separate floating LNG terminal at Kakianda, off Andhra Pradesh coast, while Petronet is building one at Gangavaram in the same state.

State-owned Indian Oil Corp (IOC) is building an LNG terminal in Ennore, near Chennai, with a capacity of 5 million tonnes at an estimated cost of Rs 4,320 crore.

It is to be commissioned in 2016. GSPC is also planning to commission an LNG terminal with a capacity of 5 million tonnes at Mundra by 2015-16.

The rush for LNG terminals is because domestic natural gas production (close to 144 million standard cubic meters per day) is meeting just half the demand. The demand for gas is projected to grow exponentially in future.

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