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The Andhra Pradesh Gas Distribution Corporation (APGDC) and the Kakinada Seaport (KSPL) signed a memorandum of understanding (MoU) for the proposed Rs 5,000 crore LNG terminal project.
APGDC is a joint venture between GAIL Gas and Andhra Pradesh Gas Infrastructure Corporation (APGIC). The proposed floating, storage and re-gasification unit (FSRU) based LNG terminal would be the first of its kind in the state and this would boost supply of liquefied natural gas (LNG) to the fuel-starved power plants in Andhra Pradesh.
The proposed terminal, which would be set up at the deep-water port of Kakinada on the east coast in East Godavari district, may be operational by September 2014.
Of the total investment of Rs 5,000 crore spread over five years, Rs 1,500 crore would be spent on the proposed FSRU terminal.
APGDC and KSPL, which is the concessionaire of the project, will together invest in the project for which the financial closure is yet to be achieved.
Chief Minister N Kiran Kumar Reddy remarked that the project would give APGDC the required impetus to fast-track its activities and complete the project in record time to ensure gas availability.
The state would get about Rs 1,000 crore per annum towards VAT (currently at 14.5 per cent on natural gas) assuming capacity utilisation remains within the state.