IndianOil, India’s largest commercial venture, has committed to a partnership with Tamil Nadu Development Corporation Ltd. (TIDCO) to set up an LNG project, which will offer the surrounding region an annual capacity of 5m tonnes.
The agreement has been sealed through a Memorandum of Understanding which contracts IndianOil to establish an LNG re-gasification terminal and gas-based Power Plant at Kattupalli, in addition to distribution pipelines. The project will be located near the Encore port on the northern outskirts of Chennai.
High hopes rest on this new contract. In particular, participants anticipate that it will transform the energy landscape of Tamil Nadu, Karnataka, Andrha Pradesh and Puducherry. The MoU incorporates the set-up of an LNG terminal with an annual production of 2.5m tonnes and the ability for this capacity to be extended to 5m tonnes. The LNG terminal is expected to cost approximately Rs. 10,000 crore and will fill around 250 acres.
The MoU was signed yesterday, by B M Bansal, the Chairman of the company, and Rajeev Ranjan, the Principal Secretary of the Department of Industries & Chairman of TIDCO, while the agreement was witnessed by several Tamil Nadu officials. The current time-frame for completion of the project is four years from the date which the company receives approval from the Board of Directors of the public sector. This approval is expected to be received by December 2010 or January 2011.
Nevertheless, conjecture continues as to whether the gas would be imported, although in a recent press statement, Bansal emphasised that talks were underway with representatives from the Middle East, African countries and Malaysia.