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AG&P Plans More LNG Terminals In India

AG&P is planning to set up more LNG terminals in India to cater to the rising demand for natural gas.

<div class="paragraphs"><p>Karthik Sathyamoorthy, President AG&amp;P LNG Terminals and Logistics. (Photo: AG&amp;P)</p></div>
Karthik Sathyamoorthy, President AG&P LNG Terminals and Logistics. (Photo: AG&P)

AG&P, a global downstream gas and logistics company, is eyeing opportunities to set up more LNG terminals in India to cater to rising demand for natural gas in the country.

“We are in talks with two or three players, but it is still not crystallised in terms of location. The plan is to look for opportunities on both the east and the west coast," said Karthik Sathyamoorthy, president of LNG terminals and logistics at AG&P.

Potential investments in greenfield projects are estimated to be in the range of $400-$600 million or Rs 3,200-4,800 crore.

The company is already setting up a terminal with a capacity of 1 million tonnes per annum at the Karaikal Port in Puducherry.

AG&P had won licences for city gas distribution business in 12 geographical areas under the 9th and 10th round of auctions by the Petroleum and Natural Gas Regulatory Board. The licenses were for Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and Rajasthan.

The majority of its 12 geographical locations are in South India, and it plans to cater to the natural gas requirements for these locations through the Karaikal terminal on the east coast.

The company also expects LNG supply opportunities from projects bid by the Petroleum and Natural Gas Regulatory Board under various auctions, once they are commissioned.

The west coast of India has a more developed gas market with established LNG terminals in Dahej and Hazira in Gujarat, Raigad in Maharashtra and Kochi in Kerala; a few others are also in the pipeline. It is also well-connected with the national gas grid and presents strong expansion opportunities.

"We are looking at both advanced greenfield and expansion projects in India,” said Sathyamoorthy.

The upcoming projects will be of higher capacity and scalable as compared to the Karaikal Port terminal. “These projects will likely be of 2-3 metric tonnes per annum and scalable compared to the initial 1 MTPA capacity at Karaikal Port,” he said.

Work at the Karaikal LNG terminal is on in full swing and is likely to be commissioned by FY24. “It will cater to the demand for compressed natural gas for the automotive segment, piped natural gas for residences, and LNG for industries in our current geographical areas,” Sathyamoorthy said.

AG&P has around 200 CNG stations, around 1,000 km of gas pipelines and over 50,000 residential customers across geographical areas, Sathyamoorthy said. It presently caters to demand from existing suppliers like GAIL Ltd. and gas allocated to the CGD players by the government.

"Going ahead, we will have a mix of spot and base load of long-term contracts for LNG," he said.

The truck-loading bays at the Karaikal port will enable delivery of LNG to remote customers by AG&P’s own fleet of trucks, according to the Karaikal Port website.

The LNG terminal will include a floating storage unit leased through a long-term charter agreement with the logistics and services division of Abu Dhabi National Oil Co., that will provide an efficient solution to make supply of LNG affordable, as per the website.