Gail, IOC Take Equity in Dhamra LNG
State owned firms Indian Oil Corporation Limited and Gail India on September 21 signed a memo of understanding (MoU) with Dhamra LNG Terminal Private Limited (DLTPL) to take equity in the 5mn mt/yr capacity LNG receiving, storage and regasification terminal to be built at Dhamra Port in the eastern Indian state of Odisha.
As per the MoU, DLTPL shall be an equal joint venture of Indian Oil and Gail India on one hand and Adani Group on the other, Indian Oil said in a statement. Indian Oil and Gail would acquire 39% and 11% equity respectively in DLTPL with the balance 50% being held by Adani Group.
Going forward, IndianOil and Adani group will each divest 1% of their respective stake to a financial institution which will then have 2% stake in the terminal. Apart from equity, Indian Oil and Gail intend to book regasification capacity of 3mn mt/yr and 1.5mn mt/yr respectively in the terminal.
MoU signing ceremony (Credit: Indian Oil Corp.)
Although, the Indian government is keen to encourage greater use of natural gas in the eastern states of country, the region lacks adequate infrastructure such as LNG terminals and pipelines. “The LNG terminal at Dhamra would provide the potential customers in these states a clean and economically viable alternative which will also help in reducing the carbon footprint. This will also provide momentum to the economic growth of this region by attracting new industrial projects,” Indian Oil said.
The terminal would also meet the gas requirements of three oil refineries of Indian Oil situated in Barauni, Haldia and Paradip. The three fertiliser plants at Barauni, Sindri and Gorakhpur, which are being upgraded, will also benefit from this terminal. The natural gas from the terminal would also be supplied to various city gas distribution networks coming up in eastern India, which in turn would cater to the requirements of piped gas for households, CNG for automobiles and clean fuel requirements of commercial establishments and industries.
The east coast of India is expected to see a number of new LNG import terminals come up in next few years. Indian Oil itself is developing a terminal at Ennore in the southern state of Tamil Nadu. India’s biggest gas importer Petronet LNG is building a terminal at Gangavaram, while Gail is in partnership with a state corporation, Shell and France's Engie (formerly GDF Suez) to build a terminal at Kakinada. According to India’s oil ministry, the country’s terminal capacity is expected to more than double by 2022.
Shardul Sharma