Southern India port invests $109m to diversify into LNG handling

18 July 2013 09:32  [Source: ICIS news]

KOLKATA (ICIS)--India’s  southern deepwater port of Kakinada will invest $109m (€83m) to diversify its cargo handling portfolio to include liquefied natural gas (LNG), leveraging on two new terminals being built nearby, an official with the port operator said on Thursday.

The port built by the provincial government of Andhra Pradesh but operated by Kakinada Seaports Pte Limited (KSPL), which is a consortium of private investors, would make the investments to increase draft of the incoming channel and allied infrastructure to handle LNG shipments to the two proposed terminals, the official said.

Bulk of the total investment would be riding on increasing the draft of the incoming channel to 16 meters which would enable the port to handle LNG vessels of 150,000 DWT (dead weight tonnage), higher than the current limitation of the port in handling a maximum 70,000 DWT-sized vessels, the official said.

Currently, coal accounts for around 80% of Kakinada port’s existing cargo handling capacity of 13m tonnes/year, the official said.

The port needs to diversify its portfolio to include LNG, following a 30% decline in iron ore exports it handled last year, he said.

Having the capacity to handle larger vessels was an imperative for the port to efficiently service import requirements of the two large LNG terminals coming up in the hinterland and the project would be completed by end-2014, just ahead of the terminals going operational, the official said.

A 5m tonne/year LNG terminal  is being built by a consortium of Shell and Reliance Corp, with an investment of $1.17bn. The capacity of this terminal will be doubled in the second phase of construction, the port official said.

Another terminal with an initial capacity of 3.5m tonnes/year will be built by the provincial government of Andhra Pradesh with an investment of $840m, with a further plan to boost the terminal capacity to 5m tonnes/year, he said.

KSPL has committed to take minority stakes in the two LNG terminals, the port official said, but details were not provided.

($1 = €0.76)

Author: Ajoy K Das

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