Petronas and IOC plan new LPG terminal at Ennore

Vol 10, PW 10 (07 Sep 06) Midstream & Downstream

Indian Oil and its Malaysian partner Petronas are planning construction of a 600,000 t/y LPG import terminal at Ennore in Tamil Nadu.

PETROWATCH learns Indian Oil Petronas, a joint venture between the two companies that is already operating a similar terminal at Haldia, will set up two cryogenic storage tanks of 10,000 and 15,000 tonnes to store LPG at 42 degrees centigrade in the first year but that capacity will most likely increase. It depends on the market requirement, Jaspal Singh, CEO of IPPL and director refineries at IOC, tells this report.

After we stabilise throughput we might increase capacity to 35-40,000 in Phase-II. Construction of the terminal is likely to begin early next year once approval is received from the Chief Controller of Explosives in Nagpur and anti-pollution authorities in Tamil Nadu.

Other approvals are also pending, adds Singh. IPPL has set aside around Rs400cr ($91m) to cover construction costs, including Rs100cr for a 12-km pipeline.

Singh estimates the terminal will be ready to receive LPG, from early 2009 imported mainly by IOC. Petronas has already made a commitment to supply 300,000 tonnes, says Singh.

Other supplies will come from places like Saudi Arabia. When completed, the new LPG terminal will help IOC reduce its dependence on Mangalore, where the saturated 600,000 LPG import terminal is working to over capacity importing 900,000 t/y LPG.

Mangalore is also logistically difficult for the market in Tamil Nadu, says Singh. It is not economical to move LPG from Karnataka to Tamil Nadu.

IOC estimates that by 2008 demand for LPG in the Tamil Nadu region will be 450,000 t/y. Other companies can also use the new LPG import terminal, which will not restrict itself to imports, but also to coastal movements of LPG.

If Paradip refinery (on Orissa coast) comes up we could receive LPG from there also, adds Singh. IOC will be using this terminal but BPCL and HPCL are welcome to use it also.

LNG Summit