LNG Alliance to take FID on India LNG project by Dec: Interview
Singapore-based LNG Alliance is expected to take the final investment decision (FID) on the recently announced India LNG import terminal project by December this year, LNG Alliance CEO Muthu Chezhian tells NGW.
“We are aiming for the FID around December of this year. It is an early-stage project, so maybe the timeline could slip by a month or so. But we are confident of having a decision within a year,” says Chezhian.
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LNG Alliance, together with the government of Karnataka, has proposed to develop an LNG import terminal in Mangalore, with an initial capacity of 4mn metric tons/year that could be later expanded to 8mn mt/yr in line with projected demand growth over the next twenty years.
In addition, this import and regasification terminal will also have an ISO LNG containerisation and LNG truck loading facility for serving the industrial and transportation sector. This will also be India's first dedicated LNG bunkering facility that will provide LNG as fuel for ships and bunkering shuttles operating off the west coast of India.
The memorandum of understanding with the government of Karnataka to develop the terminal was signed in July last year and was followed by a cooperation agreement in December.
Chezhian says that the floating storage and regasification unit (FSRU) selection process will begin in February this year while the relevant EPC contracts will be awarded by November 2022.
“We plan to lease the FSRU and expect the FSRU to arrive at the terminal by September 2024 and the first gas is expected after a month’s time, say around October 2024,” says Cheryl Goh, the executive director of LNG Alliance.
LNG Alliance intends to invest approximately $290mn dollars to develop, construct, and operate the terminal.
“As part of this agreement, LNG Alliance will develop a tolling fee based floating LNG import terminal. This terminal will also be open for third party access and will provide the most competitive tolling rates in India, based on the LNG sourced from our supply partners," says Chezhian.
The terminal will have eight truck-loading bays and each bay will be able to load 10 containers daily. “The terminal can easily load 80 LNG containers every day. We can easily double that if the operations are streamlined,” adds Goh.
Strong demand potential
The Karnataka state is a fast-growing economy in southern India with a robust industrial base. When it comes to the gas supply-demand situation, the state is extremely well-positioned, Goh says.
The captive natural gas demand in Karnataka will be served through a combination of pipeline gas supply and virtual pipeline supply using LNG trucks, with almost 60% of the offtake planned to be allocated to India’s national energy companies and the remaining 40% of the tolling capacity to be allocated to the CGD licensees from Karnataka and the hinterland regions of south India.
“The strong regional demand for natural gas and LNG, combined with the active support from the state government of Karnataka, with their streamlined and transparent business processes and with the investment-friendly business climate in Karnataka, we are confident and committed to making the first LNG available in Karnataka by 2024 and contributing to the decarbonisation plans of India,” says Chezhian.