GAIL drops plan to set up LNG terminal at Paradip

GAIL India, the nation's largest natural gas distributor, has dropped plans to set up a Rs 3,108 crore floating LNG import terminal at Paradip in Odisha.
GAIL was looking for a strategic partner for the 4 million tons a year floating liquefied natural gas (LNG) terminal off the Paradip coast.
But with a partnership with Royal Dutch Shell and GdF Suez of France coming through for a similar project off Kakinada in Andhra Pradesh, the Paradip project has been axed.
GAIL in a notice said it had on October 18, 2014 announced intention to come up with an Expression of Interest (EoI) seeking strategic partner for its FSRU project at Paradip. The publication of the EoI was to happen on March 2.

"Since GAIL is presently not pursuing the project further, this EoI for selection of strategic partner for FSRU project at Paradip Port, Odisha stands withdrawn," the notice said.
The company was seeking an LNG supplier or a major consumer of gas as strategic partner for the Paradip project for which site selection had been completed and market survey commissioned, official sources said.

The Floating Storage Regasification Unit (FSRU) was to have an initial capacity of four million tonne per annum (mtpa) in first phase, reaching a peak capacity of 4.8 mtpa, with a storage capacity of 170,000 cubic metres.
The first phase of the project was to become operational by 2017.

GAIL had in October 2013 signed an MoU with the Paradip Port Trust for setting up of the LNG import terminal.
While the port was to invest Rs 650 crore on breakwater and dredging, GAIL was to invest Rs 2,458 crore. In the second phase, four mtpa capacity will be added (peak capacity- 4.8 mtpa), raising the terminal's total capacity to 8-10 mtpa.
Paradip would have been the fourth LNG terminal on the east coast.
Besides the Kakinada project, Petronet LNG Ltd -- a firm in which GAIL has 12.5 per cent stake, is setting up another 5 million tonnes a year facility at Gangavaram in Andhra Pradesh while Indian Oil Corp (IOC) is setting up a similar facility at Ennore in Tamil Nadu.

India currently has four LNG terminals - Dahej and Hariza in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. Of these, Kochi and Dabhol are only partially operational on account of absence of pipeline for taking gas to consumers and operational issues respectively.