LNG Bharat holds on to Krishnapatnam dreams

Vol 20, PW 1 (22 Sep 16) Midstream & Downstream
     

Despite scathing criticism from the gas regulator KEI-RSOS-promoted LNG Bharat remains enthusiastic about its proposed 5m t/y Floating LNG Storage Unit (FSU) off Krishnapatnam in Andhra Pradesh.

A company source tells this report it is in talks with two state-owned companies interested in booking up to 0.7m t/y capacity in the project, which received environmental clearance on June 29, 2016. "IDBI Capital is preparing the DFR which will be ready this month (September)," he says.

"We are talking to two or three banks and expect financial closure by end-October." Project consultant INOX, he adds, is reworking the project design based on suggestions from IDBI. In addition to a 130,000 cubic metre FSU anchored offshore, LNG Bharat also wants to set up a 30,000 cubic metre capacity LNG tank and 2m t/y regas facility onshore under Phase-I and says it is in the final stages of selecting an EPC contractor.

Yet our source admits the project is struggling to find anchor customers as power companies shun expensive LNG and there are hardly any large fertiliser factories in the vicinity. GMR Energy, earlier a potential customer, is planning its own east coast terminal.

"We need to develop our own market," he says. Under review is a plan to supply LNG by truck to the north of the FSU and by pipeline to the south.