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.