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LNG project in Vizag put on hold

The Rs. 9,000- crore LNG terminal project proposed at Gangavaram Port by Petronet LNG Limited (PLL), a joint venture of leading public sector oil companies, has been dropped.

This was confirmed by the Union Minister of Petroleum and Natural Gas, Dharmendra Pradhan, to question raised by YSR Congress MP V. Vijayasai Reddy, in the Rajya Sabha on Wednesday.

Mr. Reddy had asked about the status of the project, to which Mr. Pradhan replied that in the absence of a firm commitment for buying re-gasified LNG/ capacity booking from the end consumers and no firm assurance on pipeline connectivity, the Gangavaram terminal was put on hold. The Minister also clarified that the MoU expired on May 2, 2015. The project proponent was supposed to establish re-gasification facility at Gangavaram by hiring a floating bulk carrier and the terminal capacity was envisaged to be around 5 MMTPA.

The proposal to set up an LNG terminal at Vizag by Petronet LNG Ltd (PLL) has always been shrouded in uncertainty, even in 2016; no progress was made despite the receipt of clearance from the Ministry of Environment and Forests (MoEF). PLL had sought even then assistance from the government on three areas: connectivity with three gas pipelines that pass through the state, sort of commitment from the power sector to buy at least 1MMTPA of gas for 10 years and finally exemption of levy of VAT on import of capital goods for the project and also on gas sales to end consumers for a period of five years.

 No response was forthcoming. 

The LNG terminal must have facilities for receiving, storing and regasification of LNG.


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