You are here

Indian LNG terminal gets green light

27th March 2012

South Indian gas supply gets a boost after pact emerges between IOC and Tamil Nadu-based financiers.

South Indian LNG plant in development

The Indian Oil Corporation (IOC) has secured financial backing for an integrated liquefied natural gas (LNG) terminal in Chennai, India.

Tamil Nadu Industrial Development Corporation (TIDCO) agreed to loan Rs 45bn for the project which will span 132 acres in Ennore. The LNG terminal will be modular in design, with an initial capacity of 5m tonne per year which could be doubled later.

The terminal will use the Ennore port to import LNG from various sources. It is due to be completed by the end of 2015 and should meet help meet steadily increasing piped gas demand in south India.

IOC chairman R. S. Butola said the LNG project “got some fiscal incentives from the state government”.

Increasing India’s energy demand, in general, is priority for the Indian government. At a conference in Delhi on 23 March, Indian prime minister Manmohan Singh said the government is “committed to provide necessary fiscal and regulatory incentives that would enhance and facilitate global investors to invest in the Indian gas-value-chain”.

“The Indian Government has been consistently encouraging its national oil and gas companies to invest and pursue opportunities in both Indian and overseas oil and gas markets,” he said.

The prime minster was spoke after a new pipeline was completed by Indian energy company, GAIL, worth Rs 13,000.

The pipeline covers eight states-  Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh, Haryana, Delhi (UT), Punjab and Uttarakhand - and should link up the existing network and meet the “demand-supply gap of natural gas in the Northern region of the country”, said Singh.

“The project will spur industrial development across 40 industrial hubs and has the potential to energize 3500 MW of power supply, 1.8 MMTPA of Urea productions and provide cities along the pipeline network with CNG/PNG/Natural gas for industrial and domestic applications,” he added.

Related topics: