Kakinada Seaports and Andhra Pradesh Gas Distribution Corporation (APGDC) have signed an MoU for setting up of a floating, storage and re-gasification (FSRU)-based liquefied natural gas terminal in Kakinada.

APGDC is a JV of Gail Gas and AP Gas Infrastructure Corporation. The memorandum enables them to enter into other commercial agreements.

The proposed LNG terminal will be set up in two phases with phase-I scheduled for completion by September 2014. The two phases will entail an investment of Rs 1,500 crore and Rs 5,000 crore eventually when the land base unit is set up. The terminal will have a capacity of 3.5 million tpa and will go up to 5 million tpa when the land terminal is ready. This will reduce overheads associated with importing LNG from the west coast through swapping mechanism. About $ 3-4 per mmbtu can be saved through this project.

The project will be implemented by a special purpose vehicle involving APGDC and its partner GDF Suez LNG UK.

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