IDFC, Ascent Capital Advisors and other funds backed Karaikal Port, a subsidiary of infrastructure firm MARG, is in advanced talks with three multinational companies to set up a LNG Terminal inside the Port. The new terminal would cost around Rs 2,500 crore and three firms, from US, Middle East and Singapore, have shown interest. G R K Reddy, chairman and managing director, MARG Group confirmed the development and said that the company is in discussion with three companies, for strategic investment and can also be a possible equity investor. The Port is planning to set up a three million tonne capacity LNG Terminal with an investment of around Rs 2,500 crore.
Reddy said that the Port is strategically located and 800 mega watt capacity plants are in need of gas in and around the Port. These plants are operating at less than 30 per cent capacity due to non-availability of gas. Besides, as the Government wants to develop more green cities, demand for city gas is growing, vehicles are moving from Diesel to LNG demand for LNG will certain grow. To cater to these demands the Port has decided to set up a LNG terminal.“Three investors have shown interest and we are in the final stage of negotiations, we want the terminal to be operational in the next 24-30 months,” said Reddy, while declining to share the names of the companies.
He said, the US based company is having around five lakh acres of land in US and already got gas resources and they are also backed by some of the large New York based funds, similarly the company from Middle East has access to gas resources, while Singapore company is mainly into trading of gas. Karaikal’s Port decision comes at a time increasingly ports, especially in the East Coast, are going for LNG terminal.
At Ennore Port, around 45 kms from Chennai, Indian Oil Corporation setting up a 5-million tonnes per annum LNG import, storage and regasification terminal with an investment of around Rs 4,500 crore, at Gangavaram Port in Andhra Pradesh Petronet LNG Ltd is setting up a 5 million-tonne project at an investment of around Rs 4,500 crore and the company already operate LNG terminal in Kochi. At Kakinada Andhra Pradesh Gas Distribution Corporation (APGDC), GDF Suez, Shell and GAIL is setting up a 5 mtpa floating LNG terminal, a 2-3 million tonnes per annum in Mangalore Port by the consortium of ONGC, BPCL, Mitsui and New Mangalore Port Trust (NMPT) is coming up.
MARG Karaikal port located around 300 kms along the coast south of Chennai. Currently the port has a capacity of 28 million tonnes per annum and handles coal, fertilizers, petroleum products (Liquid Cargo), edible oil, minerals & ores, Container/General Cargo. Currently the Port has five berths and around Rs 4,000 crore invested, including current and proposed infrastructure. According to company’s website, the Port is envisaged to have a total of nine berths capable of handling 47 MMTPA by 2018.
The port is envisioned to be developed in 3 phases with the final phase getting operational in 2017. Phase – I of development, which was completed in April 2009, comprises two Panamax size general cargo berths. The port is backed by investors including Jacob Ballas Capital India, Standard Chartered Private Equity, IDFC Ltd and Ascent Capital Advisors.
This post was written by Atlantic Admin