Petronet LNG Limited (PLL), a joint venture of GAIL, ONGC, IOCL and BPCL, has dropped its plans of setting up a Greenfield LNG terminal at Gangavaram Port.
An announcement has been made on the decision of BPCL to hold 74% equity leaving 26% to PLL for establishing a Liquefied Natural Gas (LNG) terminal initially with a one million tonne capacity, which would later be increased to a capacity of three to five million tonnes at Krishnapatnam Port.
BPCL has announced an investment of ₹1,500 crore to ₹1,700 crore on the facility to be developed at Krishnapatnam by 2022. It wants to start operations with one million tonnes and scale it up to three to five million tonnes.LNG terminals are considered sustainable and eco-friendly for power, fertilizer, oil refineries, steel and other crucial industries. LNG is recognised as a clean fuel the world over.
The proposal in the city for which PLL and Gangavaram Port Limited had signed an MoU in 2012 for an investment of ₹9,000 crore in the project was hanging fire from the beginning. It had to face a noisy public hearing in 2013 for the two-phase 10 million tonne terminal.
The doubts compounded with PLL failing to achieve clearances for pipeline connectivity. It also had failed to complete financial closure due to variety of factors, which included its financial results and prolonged recession in economy. The company also failed to get a strategic partner.As per the detailed project report, the project proponent envisaged creating re-gasification facility at Gangavaram by hiring a floating bulk carrier.In the first phase, it wanted raw material to be imported directly and subsequently to supply re-gasified fuel through pipeline as per the recommendations of M.B. Lal Committee set up by the Ministry of Petroleum and Natural Gas. LNG terminal was also proposed at Kakinada by GAIL but so far there is no progress with regard to it. GAIL also did not go ahead with its plan to set up LNG terminal at Paradip in Odisha. However, Adani Group is keen on establishing a five million tonne facility at Dhamra in the neighbouring State.
