India: ONGC, BPCL and Mitsui to Set Up Mangalore LNG Terminal

ONGC, BPCL and Mitsui to Set Up Mangalore LNG Terminal

ONGC, with its consortium partners BPCL and Japanese conglomerate Mitsui, will set up a re-gasification LNG terminal at New Mangalore Port. The consortium will carry out a Feasibility Study for a terminal of 2-3 MMTPA capacity, expandable to 5 MMTPA.

To formalize the intent, the ONGC-led consortium signed a MoU with New Mangalore Port Trust (NMPT) on 18th of March 2013. The MoU documents the Port’s No-Objection to carry out the feasibility studies and intention to extend all cooperation to the consortium in this regard. The MoU was executed in the presence of Karnataka Chief Minister Mr. Jagadish Shettar and Hon’ble Union Minister of Petroleum & Natural Gas Dr. M Veerappa Moily.

The MoU was signed at Mangalore by NMPT Chief Engineer M R Hedaoo, BPCL Director (Marketing) K K Gupta, ONGC Director (HR) & Business Development K S Jamestin and Mitsui General Manager Haruo Kumo. Among the attendees were Karnataka Chief Minister Jagadish Shettar, Petroleum Minister Dr. Veerappa Moily, ONGC CMD Sudhir Vasudeva, BPCL CMD R K Singh and Mitsui Chairman M Suzuki.

Feasibility studies on the project will include Technical, Marine and Environment dimensions. The studies would reveal concrete action plans, and an investment decision is expected by early 2014. The consortium is eyeing a timeline of 2018 for commissioning.

Mangalore has a unique position vis-à-vis the future Demand and Supply matrix of LNG. From the Demand side, Mangalore is a fast-growing Industrial hub with the presence of Mangalore Refinery & Petrochemicals Limited (MRPL), petrochemical complex ONGC Mangalore Petrochemicals Limited (OMPL) and Special Economic Zone Mangalore SEZ (MSEZ). Additionally, Mangalore hosts an Iron ore Industry, Fertilizer Industry and their ancillary industrial units. Currently, these industries are using heavy liquid sources like Fuel Oil and Naphtha for their energy and feedstock needs. Considering the growing demand of energy coupled with increasing focus on environment, there is a strong case for environment-friendly LNG replacing these polluting fuels.

As such, the Mangalore region rides on an LNG demand of 2-2.5 MMTPA. The demand for Gas and LNG is sustainable, expected to grow significantly with the Industries expansion plans. Once the gas pipeline infrastructure is in place, Mangalore region will get connected to all neighbouring states.

The coastal location of Mangalore also has a strategic advantage of readily available all-season operating port with favourable marine conditions and proximity to existing and upcoming global supply sources of LNG.

LNG World News Staff, March 19, 2013; Image: New Mangalore Port Trust