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Wednesday, 8 June 2016

Government mulls doubling LNG import terminal capacity

NEW DELHI: India plans to more than double its liquefied natural gas (LNG) import terminal capacity in six years to cater to the rising natural gas demand from its refineries, fertilizer and power plants. Plans to set up new terminals and expand existing facilities will push up LNG terminal capacity to 47.5 million metric tonne per annum (mmtpa) by 2022 from the current 21.3 mmtpa, according to an oil ministry document. In 2015-16, the natural gas consumption in the
country rose barely 2% to 52 billion cubic meters, of which 40% was imported as LNG. But in the last few months, the consumption has soared, rising 14% in April, banking on cheaper imports that rose 45%. As the economy expands and industries and households increase their consumption of natural gas, the dependence on imported LNG will only increase since the domestic output has been declining for years. A three-fourths collapse in natural gas prices in two years has made imports attractive. The fertilizer and power sectors have been key consumers of the natural gas in the country, depending mostly on domestic output, while refineries and petrochemicals plants have relied more on imported gas. The imported gas is liquefied at source and carried by ships to LNG import terminals where it is regassified for further supply. With expanding need for imports, Indian also needs to add more LNG terminal capacity. Currently, there are four LNG terminals at Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. The recently-built Kochi terminal is barely functional due to the delay in the construction of pipeline planned to connect the terminal with consumers. The capacity at Dahej is expected to expand to 15 million tonne by the year end from 10 million tonne at present, and further to 17.5 million tonne in future, according to the oil ministry document. A new LNG terminal at Ennor in Tamil Nadu, being built by state-run Indian Oil Corporation, with a capacity of 5 million tonne, is expected to be completed in three years. Adani group is developing a 5 million tonne capacity at Dhamra in Odisha while Shell and GAIL plan to set up a 5 million tonne terminal at Kakinada in Andhra Pradesh. 

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