French power company GDF Suez SA (GSZ.FR), GAIL (India) Ltd. (532155.BY) and the southern Indian state of Andhra Pradesh Tuesday agreed to set up the South Asian nation's first floating terminal to import liquefied natural gas.
French power company GDF Suez SA (GSZ.FR), GAIL (India) Ltd. (532155.BY)
and the southern Indian state of Andhra Pradesh Tuesday agreed to set up the
South Asian nation's first floating terminal to import liquefied natural gas.
The terminal, on
India
's
east coast, will have an annual capacity of 3.5 million tons and will likely be
commissioned by the end of 2013.
GDF Suez will hold a 26% stake in the import terminal and Andhra Pradesh Gas
Distribution Corp. will have the remainder, the companies said in a statement. The
companies didn't give any investment projections for the project.
Andhra Pradesh Gas Distribution is owned jointly by GAIL Gas Ltd.--a 100% unit
of pipeline utility GAIL (India)--and Andhra Pradesh Gas Infrastructure Corp.
India's annual LNG capacity is estimated to reach 50 million tons by 2017 from
about 13.5 million tons, as local gas shortages are driving demand for the
imported fuel.
A floating LNG terminal is a low-cost solution to imports as it can be set up
quickly--within 18 months compared with about six years for an onland
terminal--and also needs lesser capital investment as it doesn't involve
purchase of assets such as land.
GAIL would source LNG for the terminal from GDF Suez, GAIL Director Marketing
Prabhat Singh told reporters.
The deal reflects GDF's focus on
India
where
it already holds a 10% stake in Petronet LNG Ltd., the nation's largest LNG
importer by volume.
Jean-Marie Dauger, executive vice president at GDF, said that
India
,
"and more generally
Asia
,"
is a core development region for the company's LNG business.
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