Government of Andhra Pradesh today signed two MoUs for setting up a floating LNG Terminal at Kakinada Deep Water Port in Andhra Pradesh. The first MOU is the Terminal Company Agreement between APGDC, GDF SUEZ and Shell. It supports the development and execution of the terminal. APGas Development Corporationn (a JV company between the Government of AP and GAIL), GDF SUEZ ( UK based energy compnay )and Shell will have 48%, 26% and 26% equity in the project respectively.
The second MOU is the Trading Company Agreement between GAIL, GDF SUEZ and Shell and covers both the sourcing of LNG and the marketing of the regasified LNG from the terminal. GAIL, GDF SUEZ and Shell will have 48%, 26% and 26% equity in the project respectively. This will be the first LNG terminal on the East Coast of India. This is dubbed as the first step towards making East Coast into a logistic hub of Eastern Hemisphere. The Floating storage and Regasification Unit (FSRU) will be constructed with a cost of Rs.1,800 crore initially.
The MoU signing took place in Vijayawada of the in presence Chief Minister N Chandrababu Naidu and CMD of GAIL B.C. Tripathi, CEO of GDF Suez Philip Olivier, Anindya Chowdhury of Shell India and other executives from the companies. The Kakinada LNG terminal will use the Floating Storage and Regasification Unit (FSRU) with a peak capacity of 5 million tonnes per annum (mtpa) with the provision to double the capacity. The terminal will use high-end technology and will be one of the first of its kind of PPP projects in India. The Kakinada port was found suitable for a project of this nature, owing to its availability of a natural break-water in the Hope Island – a barrier that protects against the impact of high seas.
Chief minister Naidu said he was sure that these domestic and international partners would bring state of the art technology and expertise to complete the project within 18 months.