Petronet-LNG told to go slow at Gangavaram

Vol 17, PW 24 (17 Jul 14) Midstream & Downstream

Saurabh Chandra has told Petronet-LNG to line up gas customers before speeding ahead with its proposed Gangavaram LNG terminal in Andhra Pradesh.

Otherwise, warns the oil secretary, Gangavaram could end up idle like the company's Kochi terminal. Chandra, Petronet-LNG chairman since March 25 this year, made these remarks at a review meeting last month (June).

He directed company management to ‘go slow’ on tenders to build the 5m t/y terminal, expected to cost $900m. "Chandra said Gangavaram should not end up like Kochi," reports a source, "which is operating at 8% of its 5m t/y capacity.

" Only three cargoes have landed at Kochi since the terminal was commissioned on August 23 last year (2013). However he adds there’s no question of abandoning the Gangavaram project.

"Gangavaram is definitely on track," he says. "But we're carrying out a realistic gas demand assessment.

We've not stopped work completely." For now, Petronet-LNG's contracts department is ‘fine-tuning’ tenders to build two 180,000 cubic metre capacity LNG storage tanks, regasification and marine facilities to unload LNG.

"We might issue tenders in August," adds Petronet-LNG. "But it depends on Board approval.

" Petronet-LNG's board is expected to meet end-July or early August to approve first quarter results.