GAIL to work with states on LNG infra

Floating gas terminal project, which is expected to be completed in 18 months from now, will have a capacity to handle 3.5 million tonnes of liquified natural gas

GAIL (India) Limited is working with at least four states to develop liquefied natural gas (LNG) storage infrastructure to be able to handle import of 8 million tonnes of LNG starting  2017.

In Andhra Pradesh, GAIL and the state government had formed a 50:50 joint venture (JV) company, AP Gas Distribution Corporation Limited (APGDC). The JV, in turn, had entered into a strategic tie up with French company GDF Suez last year for establishing a floating storage and regasification unit (FSRU) at Kakinada seaport besides a land-based LNG terminal at a later date at the same location. GDF Suez will hold 26 per cent equity in the project.

Similar joint ventures have been formed with Kerala, Karnataka and Rajasthan. “The idea is that we have to be in a ready state with LNG terminals and pipelines etc when this LNG starts coming to India,” BC Tripathi, chairman and managing director, GAIL, said yesterday night after the signing of an MoU between APGDC and Kakinada Seaports Limited for facilitating the project.

The LNG will cost $3-4 per million British thermal units (MBTU) less than what it is on Tuesday on the east coast once the proposed LNG storage infrastructure comes into existence, Tripathi said.

The floating gas terminal project, which is expected to be completed  in 18 months from now, will have a capacity to handle 3.5 million tonnes of liquefied natural gas, according to J Wason, chief executive officer of GAIL.

While asking the company to expedite the project, chief minister N Kiran Kumar Reddy said the state would be able to save at least Rs 4 per kwh of power as compared with Rs 12 per unit paid for the power generated through expensive fuels like RLNG and naphtha.