In order to tap into the growing demand for LNG in the country, Mangalore Refinery and Petrochemicals (MRPL) – a subsidiary of Oil and Natural Gas Corporation (ONGC) – is to set up a Floating Storage & Regasification Unit (FSRU) at Mangalore Port.

MRPL has signed a memorandum of understanding (MoU) with New Mangalore Port Trust (NMPT) in Mangalore recently.

The understanding allows MRPL to conduct feasibility and other associated studies, to identify the most suitable location for the facility and consider the option of setting up an LNG Terminal/Floating Storage & Regasification Unit (FSRU).

The capacity of the terminal will be around 2-3 million tonnes, which will be scaled to five million tonnes.

It is estimated that MRPL will invest around $800m in the project, which is expected to be operational by 2018.

“The LNG terminal, once set up, will bring gas, cleaner, greener energy, as a fuel option to the entire region, and will be advantageous to industries currently using naphtha as fuel,” MRPL said in a statement.

Parent firm ONGC had previously (2013) signed an agreement with its partners – Mitsui of Japan and Bharat Petroleum Company Limited (BPCL) – with NMPT to conduct the feasibility of setting up an LNG import terminal at Mangalore. But the study did not materialise and, until today, the company is yet to announce the outcome of the study.

ONGC had planned three million tonnes capacity with an investment of $700m.