IndianOil and Dhamara port in pact for LNG terminal
New Delh   09-Mar-2012

IndianOil  has signed a pact with the Dhamara Port Corporation Ltd to develop a Liquefied Natural Gas terminal inside the port area at an investment of INR 10,000 crore.

A senior DPCL official said that "A Memorandum of Understanding has been signed between DPCL and IndianOil for the development of a LNG terminal. Both the companies will soon come out with an official communique."

Confirming the development, a top government official said that "IndianOil is going to develop an LNG terminal at Dhamara port. The terminal will have a total capacity of 15 million tonnes per annum."

IndianOil is keen to develop the gas terminal in the eastern coast of the country as the region does not have any such terminal. The LNG terminal needs 250 to 300 acres of land and will be a part of DPCL's Phase-II expansion programme.

Besides, the oil behemoth plans to use the natural gas as fuel and as feed stock for its proposed oil refinery and petrochemical complex at Paradip. The refinery is expected to be commissioned by 2013.

It may be noted that IndianOil authorities were in talks with DPCL officials since the second half of last year for the gas terminal. The oil marketing company was interested to sell the imported gas to industries based in and around the petrochemicals complex region.

India's gas demand is expected to reach 381 mscmd (million standard cubic metres per day) by 2015, compared with a supply of 202.9 mscmd. India has an LNG import capacity of 13.5 million tonnes per annum through two terminals, accounting for about 20% of the country's gas requirements.

Apart from IndianOil, Petronet LNG was also keen on establishment of an LNG terminal in Orissa. The gas major had identified Paradip, Dhamara and Gopalpur as probable locations for its proposed project involving an investment of INR 5000 crore.