ONGC-led consortium to study feasibility of M'lore LNG terminal

Consortium partners will sign memorandum of understanding on March 18

A consortium led by the Oil and Natural Gas Corporation Ltd (ONGC) will do a feasibility study on setting up a Liquefied Natural Gas (LNG) Regasification Terminal at the New Mangalore Port. The proposed terminal will have an initial capacity of 2-3 million metric tons per annum (MMTPA), which can be expanded to 5 MMTPA.

The New Mangalore Port Trust (NMPT) has given its 'no objection' to carry out the feasibility studies and extended its cooperation. The outcome of feasibility studies would throw up concrete action plans; an investment decision is expected by early 2014. The consortium is eyeing a timeline of 2018 when the terminal would be commissioned, ONGC said in a statement.

Apart from the ONGC, the other consortium members are Bharat Petroleum Corporation Limited (BPCL), Japanese conglomerate Mitsui and the New Mangalore Port Trust (NMPT). The consortium partner Mitsui has a significant presence in the global LNG value chain. An MoU between the partners is slated to be formalised in Mangalore on March 18, 2013, in the presence of Union Minister of Petroleum and Natural Gas M Veerappa Moily.

Mangalore has an important position vis-à-vis the future demand and supply matrix of LNG. On the demand side, Mangalore is a fast-growing industrial hub with the presence of Mangalore Refinery & Petrochemicals Ltd (MRPL), petrochemical complex ONGC Mangalore Petrochemicals Ltd (OMPL) and Special Economic Zone Mangalore SEZ (MSEZ). Additionally, Mangalore hosts an iron ore industry, fertiliser industry and their ancillary industrial units.

Presently, these industries are using heavy liquid energy sources like fuel oil and naphtha for their energy and feedstock needs. Considering the growing demand of energy, coupled with an increasing focus on environment, there is a strong case for environment-friendly LNG replacing these polluting fuels.

As such the Mangalore region rides on a virgin LNG demand of 2-2.5 MMTPA. The demand for gas and LNG is sustainable, and is expected to grow significantly with the current expansion plans of industrial segment and with the gas pipeline infrastructure in place, connecting the Mangalore region to all neighbouring states.

From the LNG supply side, Mangalore commands an added advantage of readily-available all-season operating port with favourable marine conditions. Mangalore is also strategically located to the existing and upcoming global supply sources of LNG, the statement added.