AP wants LNG terminal on its coast

Chief minister N Kiran Kumar Reddy on Thursday requested the Centre to set up a liquefied natural gas (LNG) terminal on the Andhra coast to meet the natural gas deficit being faced by power, fertiliser and refinery plants in the state.

In a letter addressed to Union Petroleum Minister S Jaipal Reddy on Thursday, the chief minister requested him to direct Gas Authority of India Limited (GAIL) and Petronet LNG to set up such a facility keeping in view the large deficit being faced on account of shortage in natural gas production.

Gas power projects with a total capacity of 2,770 Mw currently contribute 60 million units to the state grid. These projects are supplying power to the state power utilities under long-term power purchase agreements. They require 12.97 mmscmd (million metric standard cubic metre per day) of gas against which only 9.75 mmscmd is being supplied from both KG-D6 and ONGC fields, leaving a deficit of 3.22 mmscmd. This is leading to a generation loss of 600 Mw

The new power projects, including the one proposed to be set up by APGenco, would require around 30 mmscmd of natural gas in addition to a large demand coming from other sectors, the chief minister explained.

Reddy also said the recent experiment of swapping of regasified liquefied natural gas (RLNG) with natural gas that was being exported to the west coast from KG-D6 to increase the availability of feedstock for power projects had proved expensive.

In the given circumstances, an LNG terminal is very vital to the economic interests of the state, the chief minister said.