IOCL wants land for DPCL to set up LNG terminal

Indian Oil Corporation Ltd (IOCL) has sought early allotment of 125 acres of land to Dhamra Port Company Ltd (DPCL) by the Odisha government for setting up of a LNG terminal within the port premises.

In March this year, IOCL had entered into a pact with DPCL for developing a Liquefied Natural Gas (LNG) terminal inside the port area at an investment of Rs 10,000 crore. The terminal will have a total capacity of 15 million tonne per annum (mtpa) of which five mtpa will be commissioned in the first phase.

Out of this first phase capacity, 60 per cent gas will be consumed by IOCL’s Paradeep refinery and proposed petrochemicals complex while the balance can be supplied within the state.

The oil marketing major is keen to enter into MoU (memorandum of understanding) and subsequently form a joint venture with Odisha Industrial Infrastructure Development Corporation (Idco) for joint development of gas infrastructure and promotion of city gas distribution.

Both IOCL and Idco want to explore opportunities to be a single point agency for total energy solutions provider to industrial locations in the state.

IOCL has already submitted a draft MoU which is currently being examined by the state industries department.

As proposed in the draft MoU, all expenses for the preparatory studies and detailed project report (DPR) will be borne by IOCL. To ensure adequate allocation of gas, Idco will assess the demand of natural gas across sectors. The commerce & transport department as well as Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) will examine the proposal received from DPCL for allocation of additional land needed for LNG terminal.

As per the terms of the draft MoU, both IOCL and Idco would explore possible cooperation in the areas of total energy solutions, especially natural gas in the state. They would also strive towards development of natural gas infrastructure such as pipelines, city gas distribution network and LNG import terminals for ensuring availability of natural gas to all consumers in domestic, commercial, industrial and transport sectors after obtaining all due permissions from regulatory bodies.

It may be noted that Petroleum and Natural Gas Regulatory Board (PNGRB), the upstream regulator for the petroleum sector, had identified nine locations in the state-Bhubaneswar, Khurda, Rourkela, Bhadrak, Jajpur, Anandpur, Baripada, Balasore and Kamakhyanagar for development of the city gas distribution network (CGD).The CGD network would involve the distribution of compressed natural gas (CNG) and LNG for domestic and industrial use. The distribution is expected to be done through two proposed pipelines - the 1100-km Kakinada-Haldia pipeline of Reliance Industries Limited which will have a network of 434 km in Odisha and the 1700-km Surat-Paradip pipeline which would have a length of 400 km in the state.