PM to inaugurate world's first CNG terminal in Gujarat's Bhavnagar

A public-private partnership (PPP) model will be used to create the CNG terminal project, and Gujarat Maritime Board (GMB), which now oversees the Bhavnagar Port, would be a partner in the project

The first compressed natural gas (CNG) Terminal in the world will be built near Gujarat's Bhavnagar port for an estimated cost of Rs 4,000 crore by a consortium of the Mumbai-based Padmanabhan Mafatlal Group and the UK's Foresight Group, according to Financial Express. 

On Thursday, Prime Minister Narendra Modi will lay the foundation for the project. The massive CNG Terminal project has a cargo handling capacity of 1.5 million metric tonnes per annum (MMTPA). The Gujarat Maritime Board (GMB), which is currently managing the Bhavnagar Port will also support the project as it would be developed using a public-private partnership (PPP) approach.

According to a senior GMB official, the upcoming CNG Terminal will have the fourth largest lock gate system in the world in addition to an ultra-modern container terminal, a multipurpose terminal, a Ro-Ro terminal, and a liquid terminal. The official added that the future brown field project will also have direct door-step connectivity to the existing roadway and railway network connecting to the largest industrial zones, the Dedicated Freight Corridor, and the northern hinterland of India.

In order to expand CNG and other terminals, extensive modifications to the Bhavnagar port's current infrastructure would also be required, according to the official, which includes dredging in the port basin's water channel, building two lock gates, and off-shore infrastructure for CNG transportation. He further said that the construction of the port is expected to commence in the first half of 2023 and the port will be operational in 2026. The official said to Financial Express, “In addition to the CNG Terminal, upgradation of the Bhavnagar port will also cater to the future needs and demands of Bhavnagar district for upcoming projects such as vehicle scrapping yard, container manufacturing, Dholera Special Investment Region and other mega projects.”

In December 2019, the group led by Foresight Group presented a project proposal to GMB for the construction of a CNG terminal and additional terminals on the north side of the current Bhavnagar Port. In response, GMB sent the consortium a Letter of Intent (LOI) in September 2020 on behalf of Bhavnagar Port Infrastructure Private Limited (BPIPL), a Special Purpose Vehicle (SPV) established for the project's development. In January 2019, at the ninth edition of the Gujarat government's biennial investment event Vibrant Gujarat Global Business Summit, a memorandum of understanding (MoU) for the project was signed with the Gujarat Maritime Board.

With more freight handled at lesser inland distances, the proposed port will also produce a number of economic benefits and cost savings. The port will also help increase ancillary port-related services and contribute to the creation of almost 1,100 direct employment opportunities. The promoters and RAK Gas, Ras Al Khaimah, UAE, have already signed a contract for the supply of CNG and construction of the CNG Export Terminal.