11 months on, Mundra LNG terminal awaits commissioning

Ahmedabad: The Gujarat government-backed liquefied natural gas (LNG) project at Mundra, built at an estimated cost of Rs 5,000 crore, is yet to be commissioned. This is nearly eleven months after it was inaugurated by Prime Minister Narendra Modi.

The government set up a special purpose vehicle, GSPC LNG Ltd, to execute the LNG project in Kutch with a capacity to re-gasify 5 million tonnes per annum (mtpa).

The terminal’s capacity can be expanded to 10 mtpa and it will have a berth for receiving LNG (liquefied natural gas) tankers and storage tanks for re-gasification and evacuation.

The government set up several committees to examine issues posing hurdles to the project and find solutions. “We hope to resolve the issues soon, one way or the other,” said a government official.

One of the main reasons cited for the delay is that certain lease and sub-concession agreements between the promoters and Gujarat government are yet to be signed, government sources said. A commissioning cargo from US had arrived at the Mundra LNG terminal last November, but it had to be diverted to Hazira after it was not allowed to discharge its at Mundra, sources said.

Gujarat government owns about 50% in GSPC LNG and 25% is owned by Adani Group. The government has been looking to induct a third partner for many years now. In May, Gujarat Maritime Board invested Rs 500 crore in GSPC LNG, picking up about 40% equity in the process. The remaining 10% is held jointly by Gujarat State Petroleum Corp and its group companies, sources said.

Indian Oil had earlier announced plans to pick up 50% equity in the project for which it got in-principle approval from its board in August 2017. IOCL, which carried out due diligence on the project, eventually dropped its plans.

The LNG terminal project was conceived back in 2008 by the Gujarat government.