MoU with UK firm today on floating LNG storage

HYDERABAD: The state government will enter into an agreement with UK- based GDF Suez LNG UK Ltd in New Delhi on Tuesday for setting up a floating storage re-gasification unit (FSRU) on the eas

Published: 17th April 2012 04:41 AM  |   Last Updated: 16th May 2012 07:34 PM   |  A+A-

HYDERABAD: The state government will enter into an agreement with UK- based GDF Suez LNG UK Ltd in New Delhi on Tuesday for setting up a floating storage re-gasification unit (FSRU) on the east coast of the state.

The agreement will be signed in the presence of chief minister  N.Kiran Kumar Reddy and Union minister for petroleum and natural gas S.Jaipal Reddy.

At present, the quantum of natural gas produced domestically is not adequate to cater to the needs of electricity consumers including  non-priority sectors such as city gas distribution, ceramic and steel industries.

From the KG-D6 fields, an allocation of about 9.5 MMSCMD of gas has been made to independent power producers (IPPs) in Andhra Pradesh to meet 75 per cent of the plant load factor (PLF). But the gas supply now is only about 5 MMSCMD, bringing the IPPs’ PLF down to about 50 per cent. Besides, more gas-based power plants with an installed capacity of around 4000 MW are ready to be commissioned and they will require approximately 20 MMSCMD of natural gas.

There are three operating terminals on the west coast of the country  but no re-gasified liquefied natural gas (RLNG) infrastructure facility on the east coast to store imported natural gas.

The state government has floated Andhra Pradesh Gas Distribution Corporation Limited (APGDC), a joint venture between the Gas Authority of India Limited (GAIL) and AP Gas Infrastructure Corporation Ltd (APGIC), to create natural gas pipeline infrastructure and other related facilities and establish an LNG import terminal on the state’s coast.

The FSRU terminal, to be set up by GAIL and APGDC with an investment of Rs 4,000 crore by the end of next year, will have the capacity to re-gasify 15 MMSCM of LNG a day. It will facilitate additional power generation of 3000 MW (72 MU/day). The average cost will be around Rs 6 per unit as compared to present RLNG variable cost of around Rs 9, an official press release said on Monday.

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