Petronet LNG Ltd, India's largest liquefied natural gas importer, today signed an agreement to build a 5 million tons a year import facility at Gangavaram port on the Andhra coast.
The Rs 4,500 crore plant will be Petronet's third LNG import terminal in the country - it currently operates a 10 million tons a year facility at Dahej in Gujarat and is building another 5 million tons per annum unit at Kochi in Kerala by the year end.
"Petronet LNG Ltd (PLL) and Gangavaram Port Ltd (GPL) today signed a firm and binding term sheet for developing a land based LNG Terminal at Gangavaram Port, Andhra Pradesh with a capacity of 5 million tons per annum," the two firms said in a joint press statement.
The term sheet was signed by PLL Managing Director and CEO A K Balyan and GPL Chairman and Managing Director D V S Raju.
The LNG terminal at Gangavaram Port will comprise of facilities for receiving, storage and regasification of LNG and would be built in 42 months. LNG is natural gas liquefied at minus 160 degree Celcius temperature for ease of transporting it in ships.
"The terminal at Gangavaram Port will have the provision for further expansion like the flagship Dahej LNG Terminal of PLL," it said.
PLL had originally built a 5 million tons per annum facility at Dahej which was later expanded to 10 million tons.
The company would import LNG from gas-rich nations like Australia to meet the growing energy demand in Andhra Pradesh and other eastern and central part of India.
"The construction work on the terminal is expected to start within a year and it shall be ready to commence operations by the year 2016," Balyan said. "We are eager to have our presence on the east coast and are exploring various possible options to bring gas earlier than 2016 at Gangavaram Port".
Gas imported at the terminal would provide feedstock to refineries, power and fertiliser plants.
Raju said: "This will be not only the first LNG terminal to come up in Andhra Pradesh but also in the entire East Coast of India."
"Developing LNG terminal at the port inches us closer to our vision to see Gangavaram Port as truly modern, multi-purpose and environment friendly port," he said.
At its full operational capacity the terminal is likely to contribute over Rs 2,000 crores as Value Added Tax (VAT) to the state Government, the statement added.