MARG resurrects FSRU proposal for Karaikal

Vol 20, PW 7 (15 Dec 16) Midstream & Downstream

Chennai-based MARG Group, one of India's fastest growing infrastructure companies, has revived a 10-year old proposal to set up a LNG import facility at Puducherry, a former French colony on India's southeast coast.

BSE-listed MARG, incorporated in 1994, is betting domestic LNG demand will soar by as much as 700% in 20 years - justifying another east coast LNG facility to add to those proposed by IndianOil at Ennore, Adani at Dhamra and GAIL with Gaz de France at Kakinada. Originally conceived as a land-based terminal, MARG's project has been modified to a FSRU.

On December 2, the environment ministry in Delhi accepted a detailed project clearance application from MARG subsidiary Karaikal Port Pvt Ltd submitted on November 10 after a public hearing cleared the project on October 26. Karaikal operates the MARG-owned port in Puducherry, commissioned in April 2009.

What was behind MARG's decision to revive the project? A two-year old regional gas demand report from Dutch consultant Royal Haskoning which predicts Indian demand for imported LNG will soar from 60m cm/d to a staggering 700m cm/d in 20 years. In surrounding Tamil Nadu, Royal Haskoning predicts LNG demand will increase from 7m cm/d to 75m cm/d by 2035.

Karaikal believes R-LNG can be evacuated through a 4-km pipeline connecting the port to a 276-km Cauvery basin gas pipeline network operated by GAIL. "We're in talks with GAIL to get evacuation connectivity," confirms a company source.