Norwegian firm Crown LNG has revealed plans to build a liquefied natural gas import terminal offshore Kakinada, India.
The firm’s unit Crown LNG India has signed an agreement with East LNG to finance, build and lease the infrastructure for their offshore LNG receiving terminal at Kakinada, according to a statement on Wednesday.
Crown has also been contracted for operations and management of the facility, through the 25-year lease period, it said.
“We will build an LNG terminal that will be operational 365 days per year, including during the monsoon season, for 25 years following the completion of the terminal,” Gunnar Knutsen, CEO of Crown LNG AS, which is Crown LNG’s project services company, said.
The LNG terminal would have a capacity of 7.2 million metric tonnes per year and would support India’s gas initiative and help to reduce carbon emissions, Crown said.
Crown LNG intends to develop the LNG terminal as a gravity-based structure that sits on the seabed approximately 11 kilometres offshore Kakinada.
Not only will such a solution be able to withstand the harsh weather conditions the Indian monsoon season presents, but it will also contribute towards decongesting busy ports and keeping hazardous substances away from populated areas, according to the firm.
“By choosing this approach, we enable a 365-day operating window without placing unnecessary environmental and safety burdens on the local community in and around Kakinada,” Knutsen said.
Lack of LNG facilities
The lack of viable LNG facilities on the east coast has caused significant energy shortages for the eastern part of India, Crown said.
This is especially for high-volume energy users such as fertilizer, petrochemicals and power plants that are located in and around Andhra Pradesh.
Many facilities have even been sitting idle due to lack of natural gas supplies.
“The Indian government is dedicated to safeguarding the energy supply to domestic industry and consumers, while also facilitating a responsible energy transition. The Kakinada LNG project is proof of this,” Jørn Husemoen, chairman of Crown LNG, said.
Husemoen also said that the pipeline infrastructure near the project site is mature and therefore easy to connect to. “This substantially supports the project,” he said.
EPCIC contractor and FID
Crown LNG expects to announce the Kakinada project’s EPCIC contractor and key subcontractors during the “coming weeks.”
In addition, the company is working towards a final investment decision (FID) for the end of 2022.
Crown LNG estimates that the LNG terminal would go online approximately three years after making a final investment decision for the project.
UK, US projects
The company, together with its partners, is working on various projects, including regasification terminals for other Asian locations, that experience similar cyclones and monsoons as in the Bay of Bengal.
Crown LNG said it has also signed a letter of intent to deliver a traditional 5 mtpa FSRU to a gas-to-power project in the United Kingdom.
Moreover, the company is working on developing a project for a GBS-based liquefaction terminal to export LNG from the US.
The firm added it would reveal further information about this and other projects “in due course.”