Andhra Pradesh Gas Distribution Corporation Limited (APGDC), a company jointly promoted by GAIT., Gas Limited (GGL) and Andhra Pradesh Gas Infrastructure Corporation Private Limited (APGIC), has today signed a Project Framework Agreement (PF A) with GDF Suez LNG UK Ltd. for jointly setting up a Floating Storage and Regasification Unit (FSRU)in offshore Andhra Pradesh.
The Project Framework Agreement was signed in the presence of Shri S. Jaipal Reddy, Hon’ble Minister of Petroleum and Natural Gas, Government of India and Shri N. Kiran Kumar Reddy, Hon’ble Chief Minister of Andhra Pradesh. Mr. B C Tripathi, Chairman & Managing Director, GAIL (India) Limited, Mr. Sutirtha Bhattacharya, Principal Secretary, Infrastructure and Investment, Government of Andhra Pradesh, Mr. Philip Olivier, President & CEO, GDF Suez LNG UK, Mr. S Narayan, MD APGDC and other senior officials from GAIT, APGDC,GAIL Gas Limited, GDF Suez UK LNG and APGIC also graced the occasion.
Under the PFA, APGDC and GdF Suez shall jointly conduct a feasibility study and target commissioning of the FSRU project by the end of 2013.
APGDC has been mandated to establish an LNG importation facility in the coast of Andhra Pradesh so as to narrow the gap between demand and supply position and in the context of restricted availability of gas in the state of Andhra Pradesh and consequential underutilization of infrastructure especially in the power sector, implementation of the FSRU project assumes great significance as the same can be set up in relatively short period of time as compared to a conventional land based terminal.
FSRU is a fast track and low cost solution for LNG importation, no such project exists in India so far and very few such projects are there in the world. In order to implement the project efficiently and effectively, APGDC decided to induct a strategic partner, who has prior experience of developing such projects and would provide technical expertise for the project.
APGDC had undertaken an international competitive bidding for selection of a strategic partner for conducting a detailed feasibility study and subsequent formation of a Special Purpose Vehicle for developing the FSRU project and GdF Suez LNG UK Ltd. was selected as the strategic partner. The selection process was designed and coordinated by Mrs. KPMG and the evaluation was undertaken by experts from lIT, Chennai and Indian Port Authority (IPA) and representatives from GAIL and Government of Andhra Pradesh. With the commissioning of the FSRU project in Andhra Pradesh, gas consumption in the State would get a boost and the downstream activities are expected to significantly contribute to the State’s economic growth.
Speaking on this occasion Chief Minister said that “I would say it is a happy occasion that we are signing an agreement for supply of gas”. He said that the development of the country is depends on the production of electricity and the availability of the electricity must be at cheaper and affordable price for industries and agriculture sector and to the common man.
He said that because of the abundance of natural gas and power generation units, we must be in a position to produce surplus of power but because of gas shortage we could not produce as we can. Further he added we have capacity of producing 2200 MW electricity through gas but we are producing 1500 MW because of scarcity of gas. If the agreement will done the actual cost price of each unit would be Rs.5.80 Ps inspite of present cost of Rs.9.40 per unit.
He once again requested the Union Minister for Petroleum & Natural Gases Sri Jaipal Reddy to allocate gas linkage for Karimnagar and Shankarpalli power generation.(NSS)