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Agreement to Develop Karnataka’s First LNG Import Terminal

India's first LNG import terminal
India's first LNG import terminal will be developed with the New Mangalore Port Trust (NMPT)

Published Jan 6, 2022 6:53 PM by The Maritime Executive

Plans are underway for the development of India’s first large, LNG import terminal which would have the capacity both to provide bunker as well as fuel industry in the western Indian state of Karnataka. The Government of Karnataka through the New Mangalore Port Trust (NMPT) sign an agreement with Singapore-based LNG Alliance to develop the LNG terminal.

Over the next three years, LNG Alliance intends to invest approximately $290 million to develop, construct, and operate a Floating Storage and Regasification Unit (FSRU), and manage the LNG supply.  The initial capacity will be four million tons annually (MTPA), with provision for LNG virtual pipelines and an LNG bunkering facility. It will also have the potential for expansion up to 8 MTPA to meet the estimated demand increase over the next twenty years.

This will also be India's first dedicated LNG bunkering facility that will be providing LNG as fuel for ships visiting the NMPT port and bunkering shuttles to the west coast of India. In addition, the import and regasification terminal will also have the ISO LNG containerization and LNG truck loading facility for serving the industrial and transportation sector

"We see this as an important step to meet India's cleaner energy goals of phasing down coal-fired powerplants and transitioning to an emission-free economy using LNG as a bridging fuel. As part of this agreement, LNG Alliance will develop a tolling fee-based floating LNG import terminal, within the maritime concession area of the NMPT. This terminal will also be open for third party access and will provide the most competitive tolling rates in India, based on the LNG sourced from our supply partners," said Dr. Muthu Chezhian, the Chief Executive Officer of LNG Alliance, Singapore.

India's energy consumption has been estimated to grow by at least 35 percent by 2030. As India builds out its gas infrastructure, the officials predicted that natural gas will find multiple uses in India's energy system, including to help meet air quality and near-term emissions goals.  

"The proposed LNG terminal at NMPT will accelerate industrial growth, create job opportunities across the city gas distribution (CGD) networks, and will provide reliable energy security to Karnataka," said Karnataka's Commissioner of Industries, Ms. Gunjan Krishna.

NMPT was selected as the location for the first LNG terminal because of its strategic location on the west coast of India south of Mumbai. As a gateway port for the State of Karnataka, it is well connected with major interstate highways and railways, allowing for easy access for downstream distribution of LNG by virtual pipelines.

LNG Alliance’s goal is to build a global integrated LNG and hydrogen infrastructure portfolio. Their vision is for an integrated provider for LNG sourcing and supply, developing end-to-end infrastructure solutions from upstream gas sourcing, pipeline integration, onshore liquefaction terminals, and regasification terminals to become an LNG hub and LNG shipping services.