Indian Oil Corporation’s project to set up a liquefied natural gas (LNG) terminal in Ennore, near here, a facility that has potential to fuel industrial development in the State and parts of the region as well, is set to gain traction in a couple of months.

Such a situation prevails, following the Union Ministry of Environment and Forests’ environmental and coastal regulation zone clearance earlier this month, and the consequent decision to place before IOC Board the project update for approval. “It is a very important clearance” as only after this can work on the site begin, said sources with knowledge of the LNG terminal project.

The next stage, by April, would be to get the Board’s approval afresh in the context of the clearance. An update on the land availability and cost – original estimate was Rs.4,320 crore – will be provided.

Discussions were under way between IOC and Ennore Port Ltd (EPL), on whose land the project will come up. The Union Cabinet in May last year had approved leasing of nearly 130 acres of EPL land to the joint venture led by IOC for 30 years. The project involves setting up of facilities for receiving, storing and marketing LNG after re-gasification. The capacity of the terminal is five million tonnes per annum expandable to 10 MT.

Apart from the lease agreement, talks with EPL would also be for availing its marine services. These were likely to be finalised by April. A crucial component of the project would be a network of pipelines, running to length of 1,175 km, for which Petroleum & Natural Gas Regulatory Board had initiated the process. IOC has submitted an expression of interest to lay, build and operate the Ennore- Puducherry-Nagapattinam pipeline with spur lines to Madurai, Tuticorin and Bangalore.

Apart from catering to important customers enroute such as CPCL, MFL and upcoming Nagarjuna refinery, the project is expected to benefit some other plants dependent on domestic gas but ready to switch over re-gasified LNG and power plants. In addition, city gas distribution network were also likely to come up.

Tamil Nadu Industrial Development Corporation, which is set to pick up five per cent stake in the LNG terminal project, is expected to smoothen things in terms of paving the way for the pipelines. It will be crucial considering the opposition for GAIL India Ltd proposal to lay pipeline over farmlands for its Kochi-Bangalore natural gas pipeline through seven districts of the State.