Essar consortium forays into LNG business, bags Haldia terminal project

Plans to develop solution to tap requirements of primary, secondary hinterland with evacuation route

Essar Group has forayed into the liquefied natural gas (LNG) business by winning the bid for development of an LNG terminal with associated storage and distribution facilities at the Haldia Dock Complex under the Kolkata Port Trust (KoPT). 

Bids for setting up of the LNG project through tender-cum-auction-basis were invited earlier this year. An industry source said Essar Ports, in consortium with Ultra LNG and Essar Shipping, had emerged as the highest bidder in the project. 

Petronet LNG and V Energy were other bidders for the project. Investment on the project is estimated at Rs 425-450 crore. The project, with a tenure of 30 years, would have a minimum guaranteed traffic of 0.2 million tonnes (mt) per annum. The LNG project is expected to be commissioned in two years.

Asked on the development, an Essar Group spokesperson said: “As a group, we keep looking at growth opportunities in its businesses. But it is not our policy to comment on any specific proposal.”

Essar plans to develop an innovative solution for LNG terminal and distribution facilities in Haldia which is expected to be one of a kind to tap the requirements of primary and secondary hinterland with an evacuation route by road, rail and pipeline as and when available. 

The capacity of the terminal, that will be designed for handling of handling of LNG carriers as per prevalent draft at Haldia port, will be one million tonnes. 

Earlier, Essar Ports had announced plans to establish a floating storage and re-gasification unit at Hazira at a cost of Rs 3,500-4,000 crore.

Essar has a current capacity of 140 million tonnes per annum (mtpa) of ports and terminals in the country. The capacity is being expanded to 200 mtpa over the next few years. 

Essar Ports, which operates port terminals on the east and west coasts of the country, has recorded a 25 per cent growth in its cargo traffic in 2016-17.

The consolidated cargo handling across the company’s five operational ports at Hazira (Gujarat), Paradip (Odisha), Visakhapatnam (Andhra Pradesh), Salaya (Gujarat) and Vadinar (Gujarat) rose to 72.86 million tonnes in 2016-17, compared to 58.27 million tonnes in the previous fiscal. Third-party traffic grew by 60 per cent.

Essar Ports' dry bulk cargo rose 52 per cent at 30.39 mt compared to 19.97 mt in 2015-16. The anchor customer of the dry bulk terminals at Hazira, Paradip and Visakhapatnam is Essar Steel.