Royal Dutch Shell, Reliance Power and Kakinada Sea Ports Limited (KSPL) have joined hands to set up a 5 million-tonne per annum floating liquefied natural gas (LNG) import terminal off the coast of Kakinada in Andhra Pradesh by 2014.
GAIL (India) has already roped in French utility GDF Suez and signed a pact with the Andhra Pradesh Government for a 3.5 million-tonne floating LNG receipt facility at the same port. “After the success of Shell's Hazira terminal in Gujarat, Shell is keen to set up an LNG receiving terminal in Andhra Pradesh,” Royal Dutch Shell's Global Head of LNG, De la Rey Venter, said in an official statement here.
“We are pleased to have reached an agreement with Reliance Power and KSPL to implement the LNG terminal in Andhra Pradesh and look forward to successfully progressing this project with our partners,” he added.
Shell operates a 3.6 million-tonne a year capacity LNG terminal at Hazira in Gujarat. The project off the Andhra coast is expected to start with a capacity of up to 5 million tonnes per annum and is designed for 10 million tonnes.
Shell and Reliance Power will hold a major porton of the equity in the terminal company. Kakinada Seaports operates the Kakinada deepwater port. “This project uniquely benefits from Shell's presence in several existing and planned LNG supply projects around the world, which will help ensure diversity and security of supply,” the statement said. Incidentally, Kakinada is also the landfall point of Reliance Industries Limited's flagging KG-D6 gas fields in the Bay of Bengal.
At present, GAIL is doing a detailed feasibility report for the floating import facility. Petronet LNG Ltd., the largest importer of LNG, too, is building a 5 million-tonne facility at Gangavaram in Andhra Pradesh. Indian Oil Corporation (IOC), too, is doing a front-end engineering and design (FEED) study for a terminal at Ennore in Tamil Nadu.
Mr. De la Rey Venter said India was an important market for LNG and the states of Gujarat and Andhra Pradesh had the highest demand for gas in India. “With the completion of such studies and agreements, the consortium has finalised the specific location of a floating storage and re-gasification unit (FSRU)-based receiving terminal adjacent to the existing island breakwater, thus minimising terrestrial impact as little or no onshore facilities will be required,” it said.
“The project is progressing as per plan for completion in 2014, and statutory clearances are being progressed accordingly,” the statement added.
J. P. Chalasani, CEO, RPL, said Kakinada, with its proximity to Samalkot power plant and several other gas consumers, was a natural choice for setting up an LNG terminal.
