Decks cleared for LNG terminal projects

State resolves procedural wrangles in grounding of the two projects. While Kakinada LNG terminal and FRSU was delayed over a decision to let both Shell Company and GDP-Suez have stakes in the project being set up by AP Gas Distribution Corporation and GAIL, the issue was now resolved.

Andhra Pradesh government has paved the way for the execution of two major LNG projects by addressing issues that were holding them for the last couple of years.

While the State Cabinet cleared the LNG terminal and Floating Re-gasification and Storage Unit at Kakinada Deep Water Port by approving 26 per cent stake to the Shell Company in its last meeting on July 10, the Cabinet resolved a pending issue related payment of waterfront charges in another LNG project at Gangavaram port here on Monday.

The procedural wrangles had been delaying the grounding of the two projects and the united Andhra Pradesh government tried to address them. But caught up as it was with the more serious State bifurcation, the previous Congress government could not focus on resolving the issues.

While Kakinada LNG terminal and FRSU was delayed over a decision to let both Shell Company and GDP-Suez have stakes in the project being set up by AP Gas Distribution Corporation and GAIL, the issue was now resolved. The 3.5 million metric tonne to come up with an investment of Rs.3,500 crore is expected to be ready in 18 to 24 months and the unit would facilitate supply of imported LNG to the gas starved industries and power projects in Andhra Pradesh. The land based LNG terminal proposed at Gangavaram Port Ltd (developed in PPP mode) as a joint venture project with Petronet was held up due to a controversy over payment of waterfront charges to the port for importing LNG.

GoM

Chief Minister N. Chandrababu Naidu appointed an empowered Group of Ministers with Yanamala Ramakrishnudu and Ganta Srinivasa Rao to study the issue during the first Cabinet meeting held at Visakhapatnam. The GoM discussed the matter with the Advocate General and gave its decision that the port could not collect the waterfront charges.

On Monday, the Cabinet gave a go ahead for the Petronet LNG project after ruling out payment of waterfront charges to the port. A special purpose vehicle for the Rs.5,000 crore project with 5 million metric tonne capacity would be floated soon.

The two LNG projects when completed would earn the government over Rs.5,000 crore VAT while providing relatively cheaper alternate fuel to various sectors.

Maritime board

Sources said the government might take a decision soon on the much delayed setting up of Maritime Board in the State. The Union government made it mandatory for the maritime States for the development of ports and improve their income