LNG terminal awaits backing from AP govt

The development of an LNG terminal by Petronet LNG Limited (PLL) at Gangavaram Port appears to

be in limbo as it awaits commitment from the state government on three critical areas.

According to a reply by Union minister of state for petroleum and natural gas Dharmendra Pradhan

to Anakapalli MP Muthamsetti Srinivas Rao, PLL has requested the state government for its support

in three critical areas including connectivity of the LNG terminal to the three gas pipelines through

the state. The three gas pipelines include Kakinada-Srikakulam pipeline of AP Gas Distribution

Corporation Limited, Mallavaram-Bhilwara pipeline of GSPL India Transco Limited and East-West

Pipeline of Reliance Gas Transportation Infrastructure Limited.

The other critical area on which PLL has requested state government support is commitment from

the power sector to buy at least 1 MMTPA equivalent of gas for a minimum period of 10 years and

state government agencies, who are the current and potential consumers of gas, to buy their gas

requirement from the Gangavaram LNG terminal, the minister said, adding that exemption from levy

of VAT on import of capital goods for the project as well as on gas sales for a period of five years has

also been requested by PLL.

He said some of the LNG terminals on the east coast including Kakinada and Dhamra are making

progress and they will take away a part of the potential demand which was proposed to be met by

the Gangavaram terminal.

“However, to ensure commercial viability of such a capital intensive project, it is important to have a

sound commercial structure in place,” the minister said.

NGS INDIA