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Ennore Port, Indian Oil to sign deal for LNG plant - 2013-06-18

Ennore Port Ltd will soon sign an agreement with Indian Oil Corporation Ltd to transfer 132 acres of port land to the corporation. This is to kick-start the Rs 4,320-crore liquefied natural gas (LNG) plant at Ennore to supply piped gas in the southern region. Southern India does not have adequate supply of piped gas and the project will address this gap.

The next step will be to sign a commercial agreement with IOC to include details such as revenue share and port-related charges. “We hope to sign the agreement in two-three months,” said a senior EPL official who did not want to be named. “IOC is considering the option of signing the two agreements together,” he said.

Last month, the Union Cabinet approved the leasing of land to IOC, which will set up an LNG storage and regassification plant with a capacity of 5 million tonne per annum (mtpa). Ennore Port will lease the land to a joint venture led by IOC for 30 years. IOC had already signed an agreement with the Tamil Nadu Industrial Development Corporation (Tidco) for the project.

Once the agreements are signed, IOC will start construction of wharf, pipeline, regassification plant, tie up with gas suppliers and bring gas liners to Ennore. IOC wanted the plant to start functioning in the next three years, he said. The project had been under consideration at least for over a decade, initially by Tidco as part of its Petrochem Park project and later by Ennore port. After many hurdles, the project is taking shape, the official said.

Ennore will be the fourth LNG terminal on the East Coast. The state-owned gas utility Gas Authority of India is building a facility at Kakinada and Petronet LNG Ltd is setting up a 5 mtpa facility at Gangavaram – both in Andhra Pradesh. Royal Dutch Shell also plans to set up an LNG terminal at Kakinada. Shell and Kakinada Seaports last month achieved two important milestones towards implementing the Andhra LNG import terminal project. They submitted the draft Environmental Impact Assessment report and signed the Port Services Agreement.

The project was conceived by Shell and its partners in 2011. The technical scope development and associated execution plan is nearing its completion. The project is progressing according to plan and is on track to potentially becoming the first LNG import terminal on the East Coast.

The terminal will start with a capacity of up to 5 mtpa.

Source: The Hindu Business Line