ONGC, with its consortium partners BPCL and Japanese conglomerate Mitsui, will set up a Re-gasification LNG terminal at New Mangalore Port.
The consortium will carry out a Feasibility Study for a terminal of 2-3 MMTPA capacity, expandable to 5 MMTPA.
To formalize the intent, the ONGC-led consortium has signed a MoU with New Mangalore Port Trust (NMPT). The MoU documents the Port’s No-Objection to carry out the feasibility studies and intention to extend all cooperation to the consortium in this regard.
Post this MoU, feasibility studies on the project will be carried out, including Technical, Marine and Environment dimensions. The studies would throw up concrete action plans; an investment decision is expected by early 2014. The consortium is eyeing a timeline of 2018 for commissioning.
Mangalore has a unique position vis-à-vis the future demand and supply matrix of LNG, an ONGC release said. From the demand side, Mangalore is a fast-growing industrial hub with presence of Mangalore Refinery & Petrochemicals Limited (MRPL), petrochemical complex ONGC Mangalore Petrochemicals Limited (OMPL) and Special Economic Zone Mangalore SEZ (MSEZ).
Additionally, Mangalore hosts an iron ore industry, fertilizer industry and their ancillary industrial units. Currently, these industries are using heavy liquid sources like fuel oil and naphtha for their energy and feedstock needs.
Considering the growing demand of energy coupled with 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, expected to grow significantly with expansion plans of Industries there. Once the gas pipeline infrastructure is in place, Mangalore region will get connected to all neighbouring states.
The coastal location of Mangalore also has a strategic advantage of readily available all-season operating port with favourable marine conditions and proximity to existing and upcoming global supply sources of LNG.