Mumbai: In an attempt to benefit from the growing demand for natural gas in India, much of which is met by imports, GVK Power & Infrastructure Ltd, one of the country’s largest infrastructure developers, plans to build a port terminal in Gujarat to handle liquefied natural gas, better known as LNG. The gas is primarily used as fuel for power plants.
Road ahead:A file photo of GVK Industries chairman G.V. Krishna Reddy (left) with vice-president Sanjay Reddy. The proposed LNG terminal may become part of the Dahej port, said Krishna Reddy.
The terminal will require GVK to set up receiving and regasification facilities as LNG is transported in liquid form in specially designed cryogenic (below freezing point) ships. The liquid will be later converted into gas at the terminal.
Meanwhile, GVK has also been shortlisted as the lowest bidder by the Gujarat government for setting up a multipurpose port at Dahej.
“We want are planning to set up a maritime special economic zone, or SEZ, as part of this port development. The proposed LNG terminal may become a part of Dahej Port,” said G.V. Krishna Reddy, founder and chairman of GVK Industries. Investments in the terminal, port and SEZ are estimated at Rs 20,000 crore.
A Gujarat government official who did not want to be identified confirmed that GVK had been shortlisted to develop the port and said that it (the firm) was scouting for land to set up an LNG terminal.
“The capacity of the proposed LNG terminal is not yet finalized. We will have to identify land and sellers of LNG. Funds should not be a problem as several financial institutions have indicated that they are willing to help us,” Reddy said.
According to a Mumbai-based industry analyst who did not wish to be identified because he is not authorized to speak to the media, setting up an LNG terminal is a logical move for GVK, which operates a gas-based power plant.
“They need gas to produce power. In the case of Dahej, ports are new business opportunities that can be tapped. But the real challenge would finding the sellers for gas at right price and transportation,” the analyst added.
“Owing to recent gas discoveries, there is no scope for LNG terminals in east coast. But there is scope two to three LNG terminals in the west coast,” said S. Hajara, chairman and managing director of the Shipping Corp. of India Ltd (SCI), the state-owned shipping company that is India’s largest. SCI is the only firm that has ships with the capability of transporting LNG.
Hazira Port Pvt. Ltd, a terminal operated by Shell Gas DV of the Netherlands (in Hazira) and Petronet LNG Ltd (in Dahej), a joint venture between several government companies currently operate LNG terminals in Gujarat.
Petronet is also in the process of setting up another LNG terminal in Kochi, Kerala.
To develop the Dahej port, GVK has formed a partnership with a Malysian firm, said an executive of GVK familiar with the development who did not wish to be identified. “Gujarat is the gateway for North India. To add, SEZ will also give more focus to the port projects. We have plans to develop a maritime city, which would house related companies near Dahej Port,” added this person.
GVK is amongst India’s largest infrastructure developers; to date, the company has invested over Rs 5,000 crore into infrastructure projects and has on hand projects in the pipeline of over Rs 12000 crore.
The company leads Mumbai International Airport Pvt. Ltd, the consortium modernizing the Mumbai’s airport. It has also commissioned various power projects and has completed road construction work for the National Highways Development Programme. GVK has also entered into an agreement with Tamil Nadu Industrial Development Corporation to develop a SEZ in the state.