BPCL to build floating LNG terminal in AP

New Delhi: Bharat Petroleum Corp Ltd (BPCL) plans to invest Rs 1,500-1,700 crore in building a floating liquefied natural gas (LNG) import terminal at Krishnapatnam in Andhra Pradesh by 2022, its Chairman D Rajkumar said on Monday.

BPCL, the country's second-biggest state-owned oil refining and fuel marketing company, is betting big on gas business in anticipation of energy consumption basket undergoing change as focus shifts to cleaner sources. The company will hold 74 per cent interest in the project while the remaining 26 per cent will be with Petronet LNG Ltd, he said here.

"Initially it will be a 1 million tonne per annum FSRU based terminal which can be scaled up to 3 million tonne or 5 million tonne in future," he said. The project is likely to be commissioned by 2022. "The project may cost Rs 1,500 crore to Rs 1,700 crore," he said.

The global oil and gas market is going through a transformation as mounting climatic concerns drive changes in the energy mix in favour of natural gas and renewables.

In India, natural gas demand is slated to grow at a rate much faster than oil as the share of environment-friendly fuel rises in the energy basket. To tap this opportunity, BPCL has made a foray into city gas distribution (CGD) and is now looking to set up an LNG import terminal of its own.

Krishnapatnam will be the sixth LNG terminal to be announced, on the coast. Petronet had previously signed a firm and binding term sheet for developing a land-based Liquified Natural Gas (LNG) terminal at Gangavaram Port in Andhra Pradesh with an initial capacity of 5 million tonne with Gangavaram Port Ltd (GPL) but later dropped it.