Bizodisha Bureau, New Delhi, May 13, 2015 : State-run gas utility GAIL India Ltd and refiner Indian Oil Corp (IOC) enters into a pact pact with Adani Group-promoted Rs 5,000-crore Dhamra LNG project in Odisha for setting up of 5 million tons a year LNG import terminal, GAIL said in a press statement here.

The agreement comes close on the heels of GAIL dropping plans to set up a floating LNG import terminal at Paradip. IOC in 2012 had signed a MoU with Dhamra LNG Port Corp Ltd (DPCL) to develop a liquefied natural gas (LNG) terminal at the port.

GAIL and IOC re likely to hold half the stake in the project while the remaining may be with Adani, sources revealed.

Dhamra will be the sixth LNG project announced on the east coast.

GAIL has dropped plans of a four million tons project at Paradip. Also Petronet LNG Ltd — a firm in which GAIL and IOC are promoters — has put on cold-storage plans to set up a five million tons a year LNG import facility at Gangavaram in Andhra Pradesh.

GAIL, along with GdF and Shell, has proposed a 3.5 million tons floating LNG terminal at Kakinada while IOC plans a five million tons facility at Ennore in Tamil Nadu.

Real estate player Hiranandani Group plans to set up a Rs 2,400 crore, 4 million tonnes floating LNG import terminal off Haldia in West Bengal.

With GAIL, which owns and operates bulk of the county’s cross country pipelines, and IOC, which is a big user of gas and will need the fuel at its just commissioned Paradip refinery, joining Dhamra, the fate of LNG terminals in Andhra Pradesh is uncertain.

Dhamra port in Bhadrak district – an all-weather deep water port can meet the demands in Odisha and Andhra Pradesh.

“As per the terms of MoU, IOC and GAIL would reserve re-gasification capacity in the terminal to supply re-gasified LNG in the emerging gas markets in the eastern part of the country.