Indian Oil Corporation, the country's largest fuel retailer, has awarded a contract to build two football stadium-sized LNG (liquefied natural gas) storage tanks at its upcoming Ennore LNG import terminal in Tamil Nadu to Japanese firm Mitsubishi Heavy Industries Ltd (MHI).

"The LNG tanks will be the main facility at the first LNG receiving terminal to be constructed on India's East Coast," Mitsubishi Heavy Industries said in a statement.

This is also the first LNG storage tank order that MHI has received from India.

"Construction of the tanks is slated to begin in July of this year; completion is scheduled for the spring of 2018," MHI said.

The high-capacity LNG storage tanks will have a capacity to hold 180,000 cubic meters of gas each and will be installed at a liquefied natural gas (LNG) terminal that IOC will build near Ennore port, about 25 kilometers north of Chennai on the Bay of Bengal.

LNG imported to the terminal will be supplied as feedstock to fertiliser plants, and to utility company power generation plants for use as an alternative fuel.

Plans also call for the use of LNG as city gas in urban areas in the future.

"The terminal will initially have the capacity to handle five million metric tonnes per annum (MMTPA), expanding to 15 MMTPA in the future," the statement said.

IOC plans to build a terminal to import gas turned into liquid at minus 160 degrees Celcius (LNG) in ships at Ennore at a cost of Rs 5,150 crore by 2019.

TIDCO, a Tamil Nadu government enterprise, has a 5 per cent stake while IOC has 45 per cent in the project.

The balance 50 per cent will be for a strategic partner like an LNG supplier. Till such a strategic partner is roped in, ICICI and IDFC have agreed to hold 50 per cent interest.

Ennore will be the third LNG terminal on the east coast with state-owned GAIL India Ltd building a facility at Kakinada in Andhra Pradesh and Petronet LNG Ltd proposing a 5 million tonnes facility at Gangavaram in Andhra Pradesh.

India currently has four LNG import terminals, all on the west coast - Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala.

LNG is a gas that is cooled down to liquid form and takes up just 1/600th of the volume in its gaseous state, thereby easing transportation by sea.

"MHI has abundant expertise in the design and construction of LNG receiving terminals, storage tanks and carriers," the statement said.

As of 2:39 p.m., shares in Indian Oil were trading 1.9 per cent higher at Rs 424.40 apiece on the BSE.

Source:- profit.ndtv.com