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Petronet advances Indian east coast terminal plan

15 May 2012 12:41:20 | glm

Indian LNG import consortium Petronet LNG has signed an initial agreement with Gangavaram Port in Andhra Pradesh to develop a 5m tonne per annum (mtpa) capacity terminal on the country's east coast, the company said on Wednesday.

Petronet - partly owned by Indian state network operator GAIL and state oil refiners Indian Oil Corporation and Bharat Petroleum - said that construction would start within a year, with commercial operations at the proposed facility expected to start in 2016.

The Delhi-based company is understood to have opened a tender for a front-end engineering and design contract for the onshore terminal, and is expects to award the contract in the third quarter of the year.

Exploring options

Petronet CEO Ashok Balyan said that the company was exploring various options to deliver LNG to India's east coast before 2016.

However, he did not say whether the company was seeking to utilise some capacity from GAIL's proposed 3mtpa floating storage and regasification (FSRU), which is expected to be deployed off the coast of Andhra Pradesh in early 2014, or whether it is pursuing its own alternative fast-track plans.

The discovery and development of the Reliance Industries-operated Krishna Godavari KG-D6 field off the east coast also encouraged the development of a series of petrochemical, refining and fertilizer projects that were based on utilising KG-D6 gas.

However, the fall in output from around 60 million cubic metres (Mm³)/day in mid-2010 to around 35-36Mm³/day currently has been the catalyst for a host of LNG terminal proposals.

While a number of industries are based in the industrial port of Gangavaram itself, the 5mtpa facility will be located close to state-owned refiner Hindustan Petroleum Corporation's (HPCL) 150,000 bbl/day capacity Vizag refinery at Vishakhapatnam.

Petronet's finance director RK Garg told ICIS in March that the refinery is currently operating on naphtha, and HPCL and their immediate needs will be over 1mtpa of LNG should they choose to offtake from Gangavaram (see GLM 23 March 2012).

The state refiner is also planning to develop a new 280,000bbl/day refinery complex and 1mtpa capacity petrochemicals plant at the site by end-2014 that would significantly boost its potential LNG demand needs.

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