With a view to attract private sector investment in energy sector, more particularly in import of natural gas and it's trading in Gujarat, the Modi government has brought out LNG terminal policy, inviting private players to set up LNG terminals and necessary infrastructure on the 1600 km long coast in the state.
The policy is aimed at promoting import of liquefied natural gas (LNG), development of LNG receiving and re-gasification capacities, construction of LNG terminals and floating storage in the state.
Currently, there are two LNG terminals operating in Gujarat, one at Hazira near Surat which is operated by multinational Shell while second terminal is located in Dahej, near Bharuch, and operated by Petronet LNG Ltd.
"The state government felt it necessary to bring out a policy because many developers in recent years have shown keen interest in developing infrastructure including port for importing LNG and then supplying in domestic market," a senior official in the state energy department said.
The third LNG terminal is being built in a joint venture involving Gujarat government owned Gujarat State Petroleum Corporation (GSPC) and Gujarat-based Adani group, at Mundra where Adani also operates country's largest private port and SEZ.
However, differences have cropped up between the state government and Adani group regarding shareholding pattern of the joint venture in which GSPC will have 50 % stake. "There are also differences regarding waterfront rights where the terminal has been planned. Waterfront rights are sovereign rights so only the state has ownership and not any private entity," another official said, adding, "Owning to these differences, shareholder agreement has still not been signed regarding the JV."
Gujarat has emerged as the largest market of natural gas in the country because state promoted Gujarat State Petronet Ltd (GSPL) has created over 2000 pipeline network covering 18 of the 26 districts in the state.
The GSPL currently transports 30 MMSCMD (million metric standard cubic metre a day) gas while it's two other ambitious pipeline projects connecting Mehsana, Bhatinda, Srinagar and Jammu, 2410 km and Mallavaram, Bhopal, Bhilvara and Vijaipur 1746 km are under implementation.
The two pan India projects are in joint venture with central PSUs IOCL, BPCL and HPCL. These two projects will create natural gas market in as many as eight landlocked states in the country.