With low utilisation of an existing LNG terminal close to the port, the Bharat Petroleum Corp Ltd (BPCL) led consortium has shelved its plan to set up a Floating Liquefied Natural Gas terminal at Mangalore Port, India.

In 2013, the consortium, including Oil & Natural Gas Corporation Limited (ONGC) and Japan’s Mitsui & Co., had plans to invest $770m to set up a new three million tonnes per annum (mpta) capacity LNG terminal at Mangalore port, which would have been scaled up to 5 mpta.

The consortium had also carried out the feasibility study for the project, for which the report is yet to be announced, but looking at the low utilisation of the 5 mpta capacity Petronet LNG Ltd (PLL) plant and inadequate distribution infrastructure in the immediate region, BPCL has now scrapped the proposal.

The Petronet LNG plant, located in Kochi and commissioned in 2013, is just 360km away from Mangalore port and is generally only being used at around 10% of its capacity. Currently, it is being used at only 2%.

With the experience and performance of the Kochi terminal, the development of another new terminal in the same economic hinterland will cast shadow on its success, a BPCL official said.

BPCL’s plans to set up the terminal was to stock gas from its Rovuma oil and gas blocks in Mozambique. Now, after scrapping it, the company will look to contract all of its gas to other gas consuming countries in Asia.