Petronet awards EPC for Dahej regas expansion

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India’s Petronet LNG has taken a significant step towards further increasing the nation’s LNG import capacity with the award of an engineering, procurement and construction (EPC) contract for expansion of its Dahej regasification terminal.

The terminal, located at Dahej in the state of Gujarat on the west coast, is to be expanded from its current receiving capacity of 10 mtpa to 15 mtpa, with the new capacity starting operation at the beginning of 2017. The contract was awarded to Japan’s Toyo Engineering Corporation and its Indian subsidiary, Toyo - India, which will lead EPC work on a turnkey basis, from engineering to construction and commissioning.

The expansion project involves construction of two additional storage tanks, additional regas facilities with capacity of 5 mtpa and four LNG truck-loading bays, at an estimated cost of $590 million.

Alleviating a growing gas shortage: Commenting on the award of the contract, Toyo said: “To meet the growing demand of natural gas for electricity and fertiliser, more than 10 additional LNG import terminals are now planned to be built in India.” Toyo intends to further develop its business activities in India to win future orders related to these projects.

Petronet has executed long-term LNG supply contracts with Qatar and Australia and is currently negotiating with a number of other suppliers to help meet India’s growing gas demand and “alleviate the gas shortage in the country”.

The gas market in India is growing rapidly as strong economic growth fuels energy demand. However, domestic production is struggling to keep pace with demand. According to Petronet: “By 2016-17, imported LNG is expected to account for 55% of the total gas supply in the country.”

Petronet therefore has ambitious plans to expand its LNG import capacity and to increase the range of applications of LNG. Its strategic goal is to have 30 mtpa of regas capacity on stream by 2020, which may involve a further expansion of Dahej to 20 mtpa and construction of a new terminal at Gangavaram. The company is also in discussions with authorities in the Andaman and Nicobar Islands regarding the feasibility of supplying LNG with small barges and creating LNG hubs.

Kochi completed: Petronet is also considering installing facilities for the re-loading of small ships from its recently completed Kochi terminal to meet future requirements of coastal trade of LNG and bunkering. The 5 mtpa terminal was inaugurated by the nation’s prime minister, Dr. Manmohan Singh, in January. However, it faces under-utilisation for some time because of a lack of capacity in the nearby pipeline network.

Construction of the first 5 mtpa phase of the Dahej terminal, the first LNG receiving terminal to start operations in India, was awarded in 2000 to a consortium of Japanese companies, consisting of IHI Corporation, Toyo, Itochu Corporation, and Mitsui & Company. In 2006, a consortium of IHI and Toyo won the contract to expand the receiving capacity to 10 mtpa.

During the financial year 2012-13, the Dahej terminal surpassed its nameplate capacity. It handled 164 LNG cargoes and supplied 525 TBtu of regasified LNG. A total of 2,400 LNG road tankers were loaded and dispatched during the year.