The government of Andhra Pradesh has granted permission to the state’s Maritime Board to issue a comfort letter to the East Coast Concessions promoted by H-Energy for building Rs 1,600 crore LNG receiving and re-gasification terminal at Kakinada Deep Water Port.

The government issued an order in this regard on 8 July 2021.

The East Coast Concessions will spend another Rs 200 crore for setting up L-CNG stations in the first phase and Rs 3,600 crore in Phase-II of the project.

The comfort letter was sought by H-Energy to help its subsidiary the East Coast Concessions to continue with the LNG project directly with the AP Maritime Board or with the new port operator of Kakinada Deep Water Port in case of cessation of the concession period or termination of the concession agreement signed between the state government and Kakinada Seaports (KSPL) for an initial period of 30 years with two extensions of 10 years each which end in 2049.

H-Energy, the energy unit of Mumbai-based real estate firm Hiranandani Group, has signed a term sheet with Kakinada Seaports -- the operator of Kakinada Deep Water Port -- to sub- lease about 100 acre of land to help build the infrastructure for loading LNG and other regasification activities.

In May 2021, H-Energy started operations at India’s first LNG Floating Storage and Regasification Unit (FSRU) in Jaigarh Port, located in Maharashtra.

H-Energy is also building an LNG re-gasification terminal at Kukrahati in West Bengal on India’s East coast.

The LNG re-gasification terminal at Kakinada will have LNG re-loading and break-bulk facilities; small LNG carriers will supply LNG from Kakinada to the LNG re-gasification terminal at Kukrahati.

H-Energy is also building a 635 km natural gas pipeline from Jaigarh to Mangalore which will connect gas customers in Maharashtra and Karnataka and a 242 km natural gas pipeline from Kanai Chhata to Shrirampur (at India-Bangladesh border) which will supply re-gasified LNG to customers in West Bengal and Bangladesh. H-Energy has approval from the Petroleum and Natural Gas Regulatory Board of India to develop the India-Bangladesh natural gas pipeline.

In June 2021, H-Energy has signed a memorandum of understanding (MoU) with Petrobangla to supply regasified liquefied natural gas (R-LNG) from India to Bangladesh.

H-Energy’s wholly-owned subsidiary HE Marketing will be responsible for sourcing LNG and for supplying R-LNG to Petrobangla.

H-Energy has earlier signed an MoU with Russian gas producer Novatek to collaborate on long-term LNG supplies to India, joint investment in the three LNG terminals being built by the Indian company and form a joint venture to market Novatek’s LNG in India, Bangladesh and other markets.