A consortium of Anil Ambani-controlled Reliance Power and energy major Shell will build a terminal off the Andhra Pradesh coast to import 5 million tonne (MT) a year of liquefied natural gas (LNG) from 2014.
The consortium will build a floating terminal, which can be set up quickly. It will be located near Reliance Industries Ltd ( RIL) D-6 block. A sharp fall in output from the block has hit several power plants in the region. The terminal will help customers on the east coast who built plants in anticipation of gas supply from the RIL block.
'We are pleased to have reached an agreement with RIL and Kakinada Sea Ports to implement the LNG terminal in AP,' Royal Dutch Shell global head of LNG De la Rey Venter said in a statement.
Several power projects in the region with a combined capacity of 8,000 mega watt (MW) urgently need natural gas. These include Reliance Power's 2,400MW Samalkot unit, and others being built by GMR Energy, GVK Power and Lanco Infratech.
Reliance Power, which is setting up a 2,400MW gas-based power plant in Andhra Pradesh, is one of the largest consumer of natural gas in the region. 'Kakinada, with its proximity to our Samalkot power plant and several other gas consumers, is a natural choice for setting up an LNG terminal,' Reliance power CEO JP Chalasani said.
'The floating unit would not require land, besides, such terminals are faster in commissioning,' he added.
Kakinada Sea Ports, which operates the Kakinada deepwater port in Andhra Pradesh, will be a minority partner in the project that industry officials say would require an investment of about $1 billion (Rs56,000 crore). ET reported this first on January 3.
According to industry sources, Shell and Reliance Power would hold about 40% equity stake each, while Kakinada Port would hold the balance. The companies, however, did not disclose their equity holdings in the consortium. The partners had agreed to set up the venture in December 2011.
The oil ministry estimated India's gas demand to soar to over 356 million standard cubic meters per day by 2014-15 while domestic output would almost remain static at about 113 mmscmd. Most of the shortfall would be met through imported LNG.
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The consortium will build a floating terminal, which can be set up quickly. It will be located near Reliance Industries Ltd ( RIL) D-6 block. A sharp fall in output from the block has hit several power plants in the region. The terminal will help customers on the east coast who built plants in anticipation of gas supply from the RIL block.
'We are pleased to have reached an agreement with RIL and Kakinada Sea Ports to implement the LNG terminal in AP,' Royal Dutch Shell global head of LNG De la Rey Venter said in a statement.
Several power projects in the region with a combined capacity of 8,000 mega watt (MW) urgently need natural gas. These include Reliance Power's 2,400MW Samalkot unit, and others being built by GMR Energy, GVK Power and Lanco Infratech.
Reliance Power, which is setting up a 2,400MW gas-based power plant in Andhra Pradesh, is one of the largest consumer of natural gas in the region. 'Kakinada, with its proximity to our Samalkot power plant and several other gas consumers, is a natural choice for setting up an LNG terminal,' Reliance power CEO JP Chalasani said.
'The floating unit would not require land, besides, such terminals are faster in commissioning,' he added.
Kakinada Sea Ports, which operates the Kakinada deepwater port in Andhra Pradesh, will be a minority partner in the project that industry officials say would require an investment of about $1 billion (Rs56,000 crore). ET reported this first on January 3.
According to industry sources, Shell and Reliance Power would hold about 40% equity stake each, while Kakinada Port would hold the balance. The companies, however, did not disclose their equity holdings in the consortium. The partners had agreed to set up the venture in December 2011.
The oil ministry estimated India's gas demand to soar to over 356 million standard cubic meters per day by 2014-15 while domestic output would almost remain static at about 113 mmscmd. Most of the shortfall would be met through imported LNG.
....more info