Essar plans LPG terminal to meet high demand

Vol 18, PW 6 (06 Nov 14) Midstream & Downstream

Essar is firming up plans to enter the lucrative LPG storage and distribution business by setting up a terminal on the west Gujarat coast.

Essar applied to the environment ministry on October 7 for clearance to set up a 2.5m t/y LPG terminal at Bharana village near Vadinar in Jamnagar district. Expected to cost around Rs430cr ($70m), it will be set up near the company’s established 58m t/y (405,000 b/d) Vadinar oil refinery.

Essar wants the LPG terminal commissioned within 24 months and expects environment ministry terms of reference in place by early next year (2015) with formal environment ministry clearance expected by mid-2015. “All approvals need to be in place before beginning work,” says Essar.

“It’s too early to comment on the construction schedule.” Essar has floated a Special Purpose Vehicle (SPV) called Petro Tankage India to set up the terminal on 40 hectares of land already in its possession.

This effectively means there will be no land procurement hurdles. When ready, the proposed terminal will have refrigerated LPG storage capacity of 32,000 tonnes - two 16,000 tonne tanks to store propane and butane.

Propane will be stored at minus 40-degrees and butane at minus five degrees. The proposed terminal will use Essar’s marine jetty to import LPG.

Essar plans to add new berths in the future at the jetty if demand increases.