The first MoU set up a terminal company between APGDC, GDF Suez and Shell. The APGDC, a joint venture company of AP government and GAIL, GDF Suez and Shell will have 48%, 26% and 26% equity in the project respectively. The second MoU is to set up a trading company and covers both the sourcing of LNG and the marketing of the regasified LNG from the terminal. GAIL, GDF Suez and Shell will have 48%, 26% and 26% equity in the trading company, respectively. 

The MoU signing took place in the presence of chief minister Chandrababu Naidu and CMD of GAIL B C Tripathi, CEO of GDF Suez Philip Olivier and Anindya Chowdhury of Shell India in Vijayawada. 

Estimated to cost Rs 1800 crore, the floating LNG platform is likely to be ready in the next 18 months. The Kakinada port was identified as suitable for a project of this nature owing to its availability of a natural back-water in the Hope Island – a barrier that protects against the impact of high seas. 

The LNG terminal is expected to give a fillip to gas-based industries in the state. With the current shortage of gas standing at 15 mmscmd (million metric square cubic metres daily) likely to touch 40 mmscmd very soon, AP is set to gain major advantage in roping in gas-based industries. As natural gas is emerging as a significant fuel for economic development of the country and the LNG terminal termed as the safest gas storage system, the Kakinada terminal is set to play a far reaching role in making natural gas available to various consumers in industrial, commercial and domestic sectors. 

“This will be the first LNG terminal on the east coast of India. In my efforts to boost port-led development, I realise that this project will help us in making the state a logistics hub,” said Naidu.