Liquefied Natural Gas terminal in Tamil Nadu taking shape

With India’s adoption of gas for household and industrial usage increasing, the Philippines-based AG&P has been tapping business opportunities in India. It has charted a plan that seeks to build its presence in Tamil Nadu with primary data around the Karaikal port region showing promise. 

Abhilesh Gupta, Group CFO and Commercial Head of AG&P, throws more light on the developments after the India operations kick-started eight months ago. 

“After the failure of energy majors to exploit domestic sources to mitigate the gas shortage in the country, AG&P decided on a customer-centric solution. We identified an opportunity here as the East Coast is an isolated market where no trunk pipelines exist as of now,” Gupta said. 

Noting that Indian Oil Company’s plan to build a pipeline from Ennore to Thoothukudi was beset with challenges, he said, “Setting up a pipeline in India remains a dream.  Local opposition or the right of use issues have made projects unviable. 

In some places, the right of use cost itself has gone up by 25% to 30 % of the total project cost. Moving the gas through a pipeline became a big roadblock.” Mega projects involving terminals with a 5-15 mn tonne capacity not only meant servicing markets with sizeable customer base (Western region) but also that the initial cost was passed on to the customers, he said. 

“We have pioneered a modular construction or re-gas unit. We have conceptualised and mastered the technique to come up with a 1 million tonne (MT) re-gas facility, which can be tweaked and customised based on the demand metrics. We have our own engineering team in Houston which has been developing this,” he said. 

Gupta elaborates,“We want to provide entire solutions, right from sourcing of LNG to re-gasification, transferring LNG by trucks or supplying this fuel to the doorstep of the customer.”  

Gupta goes on to say, “We have already commissioned detailed door-to-door study to collect primary data with a management consultancy and are awaiting the final report this month. We are focusing on the Karaikal port and regions within 300 km, largely targeting central or southern TN (Madurai, Tiruchy, the major commercial centres and Thoothukudi),” he said. 

He lamented that despite TN being the second largest contributor to the GDP, there is no gas in the state and that expensive fuel was being used. 

“TN has all the favourable factors, good purchasing power (almost like Gujarat) and an educated workforce. We are targeting the central part of TN. If we bring gas at any cost linked to a brand, it is 50 per cent cheaper than petrol, 40 per cent cheaper than diesel and 20-30 per cent cheaper than commercial LPG. 

These fuels can be replaced with much cleaner alternatives that are efficient. The maintenance cost of equipment is also reduced substantially,” he pointed out.