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Business News/ Politics / Policy/  Kolkata port reverses decision on LNG facility
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Kolkata port reverses decision on LNG facility

Port has invited EoIs from firms to set up, operate non-jetty-based LNG unit at Sandheads within port limits

Kolkata port will receive vessel-related charges from LNG carriers, wharfage on cargo and way leave charges on area covered by the sub-sea pipeline from the entity running the LNG-FSRU project. Photo: Indranil Bhoumik/MintPremium
Kolkata port will receive vessel-related charges from LNG carriers, wharfage on cargo and way leave charges on area covered by the sub-sea pipeline from the entity running the LNG-FSRU project. Photo: Indranil Bhoumik/Mint

Bangalore: The Kolkata port trust has reversed its decision taken in November to allow a Hiranandani Group company to set up a gas storage and re-gasification unit on a nomination basis, after the Union shipping ministry advised in late August that the plan was in violation of rules that mandate open tendering.

In November 2013, the trust that runs the Union government-owned port had decided to allow the private firm to set up a so-called liquefied natural gas (LNG) floating storage and re-gasification unit (FSRU) on a nomination basis (without a tender).

Last week, the port invited so-called expressions of interest (EoIs) from firms to set up and operate a non-jetty-based LNG-FSRU floating storage unit (FSU) at Sandheads within port limits.

The FSRU/FSU project involves importing LNG on LNG ships, transferring it to storage tanks of FSRU, re-gasifying LNG on FSRU (optional) and transferring LNG to the on-shore receiving facility through a sub-sea pipeline, according to the EoI notice reviewed by Mint.

The FSRU/FSU will be a common user facility where users and marketers of natural gas will source LNG from various suppliers.

Kolkata port will receive vessel-related charges from LNG carriers, wharfage on cargo and way leave charges on area covered by the sub-sea pipeline from the entity running the LNG-FSRU project.

In November 2013, the board of trustees of Kolkata port had given approval to H-Energy East Coast Pvt. Ltd to set up and run a 4 million tonnes per annum (mtpa) FSRU project for 25 years extendable by another 15-25 years. LNG from the FSRU was to be sold to state-run natural gas firm GAIL (India) Ltd to feed its proposed Haldia-Jagdishpur pipeline to meet the demands of consumers in the northern and eastern parts of the country. The ultimate capacity of the FSRU project will be 8 mtpa.

H-Energy received environment and coastal regulation zone approvals in June from the expert appraisal committee in the Union ministry of environment and forests for the project.

H-Energy East Coast is a wholly-owned subsidiary of H-Energy Pvt. Ltd, which in turn, is part of the Mumbai-based Hiranandani Group.

The port’s decision came under flak for alleged favouritism to H–Energy because it was given without issuing a tender, which is a key requirement for giving out projects as per guidelines of the Central Vigilance Commission. The approval also violated the Major Port Trusts Act as it was taken without the prior sanction of the Union government.

The shipping ministry representative on the board of trustees of Kolkata port at the time advised the port to go for seeking expressions of interest instead of awarding the rights to a private firm on a nomination basis.

A spokesman for Kolkata port declined to comment. H-Energy could not be reached immediately for comment.

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Published: 21 Sep 2014, 11:23 PM IST
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