KOLKATA (miningweekly.com) – The Indian government will frame a policy to facilitate the construction of floating storage and regasification unit (FSRU) liquefied natural gas (LNG) terminals at every major port in the country.
The policy will lay down investment structure options for private investors so that there is a shift in focus from land-based LNG storage terminals to offshore terminals, as the construction cost of latter is almost half of land-based terminals, an official familiar with framing the proposed policy said.
He said that FSRU LNG terminals at every major port would merely entail lease of a waterfront wherein offshore storage ships with onboard regasification plants would be moored and linked directly to a gas pipeline network, which would ensure a much more cost efficient way of increasing total LNG storage capacity in the country.
Since FSRU would not entail acquisition of land, gestation periods would be shorter and enable speedier ramping up of total storage capacity available for imported LNG, which was a prerequisite if government’s target of increasing natural gas use by two-and-a-half times by 2030 and to 15% of the country’s energy mix were to be achieved.
Currently, natural gas accounts for 6.5% of India's total energy mix. To increase LNG’s share in the total energy mix to 15%, total LNG storage capacity would need to be increased to 47.5-million tons, almost double the capacity currently available at terminals across the country.
Officials pointed out that while some major ports like Mumbai Port Trust had floated tenders inviting investors to construct FSRU storage facilities on waterfront controlled by the port, there had not been any response - presumably in the absence of a policy framework from government.
Some private investors have announced FSRU LNG storage facilities along India’s eastern coastline, but these are largely outside the governance purview of the central government as there was no policy guidelines at present.
Real estate major, the Hiranandani Group, which operated an FSRU facility in Maharashtra, in the west, has proposed a similar storage facility in West Bengal along the Bay of Bengal coast, while two more were on the anvil along the coast of Andhra Pradesh, at the ports of Kakinada and Krishnapatnam.