IOC to form four JVs for Kakinada LNG project
The Indian Oil Corp.-led liquefied natural gas consortium that was recently awarded the right to construct an LNG complex in the eastern Indian port city of Kakinada in Andhra Pradesh plans to float four separate joint ventures to implement different segments of the ambitious 194 billion-rupee ($4.22 billion) project.
MUMBAI�The Indian Oil Corp.-led liquefied natural gas consortium that was recently awarded the right to construct an LNG complex in the eastern Indian port city of Kakinada in Andhra Pradesh plans to float four separate joint ventures to implement different segments of the ambitious 194 billion-rupee ($4.22 billion) project (OGJ Online, July 26, 2000).
�The four joint ventures will be in the areas of shipping of the gas, the terminal and regasification facilities, the pipeline network, and the marketing and distribution activities,� said Mohamed Asad Pathan, chairman of IOC, chief promoter of the project.
Other consortium members include Petronas of Malaysia and the Cocanada Port Co., a special-purpose vehicle floated by International Seaports Pte. Ltd. of Singapore.
�We will retain a 26% equity stake in each of the four joint ventures, and are currently negotiating with our consortium partners as to how much equity they would like to take,� said Subir Raha, an IOC official. �The entire project will have a debt-equity ratio of 1:3. We will also retain the option of floating a fifth joint venture outfit for the purpose of building an LNG-fed power project in Kakinada.�
The first phase of the Kakinada LNG project, which will cost 51.5 billion rupees, includes the construction of the first LNG berth at a cost of 1.5 billion rupees. A pipeline network will cost 35 billion rupees, and storage and regasification facilities, 15 billion rupees.
A second LNG berth, costing 3 billion rupees, will be added during the second phase, which will cost 63 billion rupees. Additional storage and regasification facilities will cost 30 billion rupees, and the related pipeline network, 30 billion rupees.
The third phase, costing 30 billion rupees, will involve inland and storage facilities and a distribution network for dimethyl ether, an alternate fuel. Another 40 billion rupees will be spent later to construct a power plant, Pathan said.
The project has been given a letter of support by the Andhra Pradesh government that provides in-principle clearance for the consortium to implement the project.
In other India LNG news, Muri Mohamed, a senior Petronas official, said that the Malaysian company would begin supplying LNG to India through US multinational Enron Corp. in 2003. Details of the mode of shipping and the company to be used are being worked out.