India's GMR Inks Pipe MoU
Kakinada SEZ, a subsidiary of GMR Infrastructure, October 11 signed a memorandum of understanding with the Andhra Pradesh Gas Development Corporation (APGDC) to get access to piped natural gas for its upcoming 10,500-acre zone.
“With this development, Kakinada SEZ would be the first zone on eastern coast of India that can provide piped natural gas supply to all its industrial units,” GMR said. The zone, which is located on the Vizag-Chennai Industrial Corridor offers 8,521 acres of industrial land with another 1,879 acres earmarked for a greenfield commercial port. Kakinada SEZ lies 6 kms away from the Kakinada Srikakulam pipeline.
APGDC has agreed to lay a spur line from the main trunk line to the zone premises for facilitating piped gas access to commercial and industrial customers. APGDC has been authorised by Indian downstream regulator Petroleum and Natural Gas Regulatory Board (PNGRB) to lay, operate and expand gas distribution network in the state of Andhra Pradesh. It is executing the Kakinada – Srikakulam high pressure gas pipeline to facilitate supply of gas for industrial use. The work for 90 km of first phase of the pipeline originating at Kakinada is already underway, GMR said.
APGDC and GMR expect gas demand of about 0.5mn m3/d in the initial two years which is likely to rise to 2mn m3/d in 10 years. “This unique development will be a boon for gas dependent industries like ceramics, glass, fertilisers and chemicals in this region. Since gas constitutes a major portion of their costs, a 30-40% saving on gas price will yield significant competitive advantage,” Kakinada SEZ CEO Challa Prasanna said.
ONGC is planning to invest about $5bn in its KG basin oil and gas block off India’s east coast. The gas from the block will have a land fall point near Kakinada. India is developing LNG imports on the east coast as well.