“The terminal will receive a commissioning cargo on January 22. Gujarat State Petroleum Corp (GSPC) has booked a cargo from Qatargas which is expected to arrive soon,” said two senior state government officials.
The state government backed project, built for an estimated cost of Rs 5,000 crore, is poised to be the country’s sixth and the Gujarat’s third LNG terminal to become operational.
The government has set up GSPC LNG as a special purpose vehicle for the Mundra terminal which has a capacity to re-gasify 5 million tonnes per annum (MTPA). The state owns about 75% stake in the project through various Gujarat government-run companies, including GSPC. Adani group, which holds 25% stake in GSPC LNG, is the co-promoter.
With the softening of international gas prices, the demand for imported LNG is set to rise in the near future. The Mundra project is expected to address the capacity constraints faced by the industry due to infrastructure bottlenecks, say experts.
Of the 23 million tonnes of LNG imported by India in 2019, about 21 million tonnes were through the two terminals in Gujarat located in Dahej and Hazira. The other terminals at Dabhol, Ennore and Kochi are faced with infrastructure challenges like breakwater issues and pipeline problems. The timing is right for Mundra terminal to begin operations,” according to an industry expert.
The LNG prices, which were hovering around US $6 per million British Thermal Unit (BTU) last year are expected to touch US $4 per million BTU in 2020, he added.
“In the case of Mundra, it would take about 15 days for commissioning the terminal. We expect the terminal to begin commercial operations from the second week of February,” said a GSPC official.
The construction of the project was completed in 2018 and it was inaugurated by Prime Minister Narendra Modi in the same year in September. However, it was not commissioned owing to commercial disputes between the project partners, said government sources.
An official of Adani group when contacted, declined to comment on the matter.
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