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Shell signs port services pact for AP floating LNG terminal

Royal Dutch Shell said on Monday that it has signed a port services agreement for setting up a floating liquefied natural gas (LNG) import terminal at Kakinada in Andhra Pradesh. Also, a draft environmental impact assessment report has been submitted, which along with the Port Services Agreement was described by Shell as 'two important milestones'.

Shell had on May 31 last year announced the setting up of a floating facility to import 5 million tonne a year of liquefied natural gas (LNG) at Kakinada.

Kakinada is the same site for which state-owned gas utility GAIL India had roped in French utility GDF Suez and signed a pact with the Andhra Pradesh government for a 3.5-million tonne (mt) Floating and Storage Regasification Unit (FSRU) facility.

'The draft Environmental Impact Assessment report for the proposed development of the Andhra LNG terminal at the Kakinada deepwater port was recently submitted to the State Pollution Control Board in Kakinada,' Shell India said in a statement here.

Shell and Kakinada Seaports on April 11 signed the Port Services Agreement, setting out the commercial arrangements underlying the development and operation of the required port facilities for the entire duration of the project. 'The project is now rapidly advancing to fruition. The technical scope development and associated execution plan is nearing its completion,' the statement said.

The terminal will start with a capacity of up to 5 million tonne per annum (mtpa) and is designed for easy expandability to 10 mt to meet the surging demand for gas in the region, it said but did not give a date for commissioning of the project. Shell has established the project company, Andhra LNG Pvt Ltd, as the venture to develop, implement and operate the LNG import and regasification terminal.

Roger Bounds, Shell Vice-President (Global LNG) said, 'Shell welcomes the signing of the Port Services Agreement and the imminent public hearing on the site following the submission of the draft EIA.

The Kakinada project uniquely benefits from Shell's presence in several existing and planned LNG supply projects around the world which will help ensure diversity and security of supply to the state of Andhra Pradesh."

Yasmine Hilton, Chairman of Shell Companies in India said, 'India is an important market for LNG and the states of Gujarat and Andhra Pradesh are key markets for gas in India. After the success of Shell's Hazira terminal on the west coast in Gujarat, we are keen to set up an LNG receiving terminal on the East coast in AP.'

Andhra LNG Pvt Ltd CEO Sander Stegenga said the signing of the PSA and submission of the EIA report brings Shell 'a step closer to delivering much needed gas supply to Andhra Pradesh and contributing towards the development of gas-driven economic growth in the State'.
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