GAIL plans RLNG terminal on East coast

GAIL, in association with other companies, is planning to set up an RLNG (re-gasified liquefied natural gas) terminal with a capacity of 2.5 mtpa or 10 mmscmd keeping in view the natural gas shortage faced by power plants and other industries located in Andhra Pradesh.

While the proposal is in the preliminary stages, companies like the Indian Oil Corporation, Petronas and IL&FS have shown interest to partner the project, according to a senior government official.

The AP Gas Infrastructure Corporation (APGIC), a joint venture company set up by GAIL and the AP government, is spearheading the project.

“GAIL officials from Delhi will attend the board meeting scheduled to be held the day after tomorrow and would discuss issues relating to the proposed project,” V Srinivasulu, executive director of APGIC, told Business Standard.

Authorities of AP’s Investment and Infrastructure Department have been pushing for an RLNG terminal project in recent months as the natural gas shortage is affecting the capacity utilisation of gas-based power plants in the state.

The government feels that an RLNG terminal would not only take care of feedstock requirements of power plants in times of natural gas shortage, but would also attract new industries looking for natural gas as fuel for running their operations.

The project is expected to cost anywhere between Rs 500 crore and Rs 1,000 crore depending on the technology that would be adopted for the project, according to state government officials.

“Responding to our request the Government of India has already directed GAIL to work closely with the AP Government on the project. We will play a facilitator role in its successful implementation in the interests of the state,” said Suthirtha Bhattacharya, principal secretary, AP Infrastructure and Investment.

According to the officials, the coastal town of Kakinada is one of the options for locating the project.