India commits to 15% share of energy mix for natural gas, while engineering advances for new US$800M GBS offshore LNG receiving terminal and other gas infrastructure
Declining domestic gas production and a growing need to replace coal-fired power with cleaner energy continues to drive India’s LNG imports and investments in gas infrastructure. As the world’s fourth largest LNG importer behind Japan, China and South Korea, India is poised to increase its LNG imports in the years ahead to meet its natural gas demands.
Despite the impact of Covid-19 last year forcing countrywide lockdowns, India increased its imports of LNG 11% to 26.63M tonnes and commissioned new regasification capacity. India’s natural gas consumption is expected to rise by 4.5% in 2021, according to the International Energy Agency (IEA).
That growth will continue beyond the next decade, based on Indian government energy and environmental policy. In June, Indian Minister for Petroleum & Natural Gas and Steel Dharmendra Pradhan said India is committed to achieving 15% share of natural gas in the primary energy mix by 2030 to help reduce environmental pollution and meet its commitments to COP-21. Currently, natural gas represents about 6.5% of the country’s energy mix, and domestic gas production grew by 19.1% and LNG by 9.2% in May 2021, as compared to the same month year-on-year, according to government data.
Transitioning the country’s energy dependence on coal to natural gas will not be as simple as flipping a switch. This will require massive investment – an estimated US$60Bn – to lay gas pipeline and build LNG receiving terminals and infrastructure, according to Minister Pradhan.
The good news is the effort is underway. In March 2020, the Mundra receiving terminal, owned by GPSCLNG, entered operation as the country’s sixth import facility. Two terminals using floating storage and regasification units (FSRUs), one owned by H Energy and another Swan LNG, will add more capacity on the country’s west coast. Höegh LNG’s FSRU Höegh Giant, chartered to H Energy for 10 years, will be commissioned at the LNG receiving terminal at Jaigarh port in Maharashtra in July, while Swan LNG’s Vasant 1 will have a commercial start in March 2022.
In all, India has a total of 10 LNG receiving terminals in operation, under construction or completed and not yet in operation, with another three proposed.
One of the proposed is a new offshore LNG terminal in eastern India that is moving towards FID in late 2022, with recent awards advancing the facility’s engineering.
“Crown LNG will utilise well-proven technologies for this project to minimise development risk”
Oslo-based LNG infrastructure developer Crown LNG has awarded key contracts to Aker Solutions, Wärtsilä and Siemens Energy, underpinning a new gravity-based concrete structure (GBS) offshore LNG terminal that will be cited 19 km north-east of Kakinada on India’s east coast. Situated in the Bay of Bengal, the terminal will be exposed to challenging monsoon weather conditions from June to September.
Crown LNG estimates an investment of about US$800M in both the LNG terminal and pipeline to shore.
“Crown LNG will utilise well-proven technologies for this project in order to minimise development risk,” Crown LNG chief executive Gunnar Knutsen tells LNG Shipping & Terminals. “That is also why Crown LNG has teamed up with the most experienced partner in developing a gravity-based structure: Aker Solutions,” he said.
Norway’s Aker Solutions was named the main contractor for the project, and will serve as engineering, procurement, construction, installation and commissioning (EPCIC) contractor once FID is taken.
Aker Solutions’ scope includes technical development of the concrete foundation and topsides, as well as the pipeline between the offshore regasification terminal and the onshore gas grid. While the concept remains to be matured, the GBS is expected to be more than 200-m long, around 60-m wide and 40-m tall. The topside will consist of LNG regasification facilities, supporting systems, living quarters, helideck, cranes, and an electrical and instrument building.
Decision behind the GBS
Crown LNG believes that by opting for a GBS solution, the LNG terminal it will be able to withstand the punishing weather conditions presented by the Indian monsoon season, while enabling a 365-day operating window for the terminal. KGLNG’s license has recently been updated to reflect Crown LNG’s solution and 365-days operational window.
One of the world’s leading contractors for advanced concrete structures, Aker Solutions has designed and built concrete GBSs for the North Sea and Arctic waters for the past four decades, including delivering the world’s first LNG offshore terminal in concrete, the Adriatic LNG Terminal, which began operating 14 km offshore the Rovigo Province, Italy in 2009.
“In the past, we have delivered some of the largest and most complex offshore concrete installations,” says Aker Solutions executive vice president topsides and facilities Sturla Magnus. Mr Magnus says the contractor will lean on its more than 40 years of concrete experience, which includes offshore installations Troll A, Hebron, Sakhalin I & II and Adriatic LNG.
At 472-m high and weighing some 683,000 tons, the Troll A platform off the west coast of Norway is the tallest structure ever moved and second heaviest to another North Sea platform, Gullfaks C.
Under its contract, Wärtsilä will conduct the front-end engineering and design (FEED) to support development of the LNG import terminal’s regasification system. Over the years, Wärtsilä has delivered regasification systems for more than 20 similar FSRUs. The Wärtsilä system will serve the terminal with an annual regasification capacity of 7.2 mta and will include the boil-off gas (BOG) handling and fuel gas systems.
Meanwhile, Siemens Energy will deliver a power generation and electrical distribution system onboard the GBS, including all control systems.
“Siemens Energy and Wartsila have extensive experience from supply of LNG technologies, which make them ideal sub-contractors for their respective work packages,” says Mr Knutsen.
While he thinks it will be a challenging project, Mr Magnus agrees, noting both suppliers are well qualified. “Wärtsilä has an excellent track record in delivering regasification systems, and we are confident that they are a good match for this assignment,” says Mr Magnus.
“Our regas systems are delivered as complete modules, with all the engineering, component procurement, and construction of the module carried out entirely by the company’s execution team. This makes integrating the modules very easy, and we look forward to smooth inter-connection work with the other project partners,” notes Wärtsilä Gas Solutions general manager, strategy and business development Reidar Strande.
Under an exclusive deal, Crown LNG will finance, build and lease the LNG infrastructure to KGLNG, a subsidiary of East LNG. KGLNG is the company that has the license to establish the LNG receiving terminal at Kakinada, while East LNG is the holding company that owns KGLNG. Additionally, Crown LNG has been contracted for operations and management of the facility, through the 25-year lease period.
It is estimated that the LNG terminal will be completed and fully operational approximately three years after FID is taken.
|India’s LNG terminal infrastructure|
|Hazira||Shell, Total Gaz Electricite||5.0|
|Ennore||Indian Oil Corp||5.0|
|Total existing capacity||37.5|
|Mundra||GSPL, Adani Group||5.0|
|Jaigarh (FSRU Höegh Giant)||H Energy||4.0|
|Jafrabad (FSRU Vasant 1)||Swan LNG||5.0|
|Chhara||HPCL & Shapoorji Pallonji Group||5.0|
|Total under construction or completed and not yet operational||24.0|
|Proposed or in development|
|East Coast||Petronet LNG||5.0|
|Kolkata/Digha Port||H Energy||2.5|
|Note: Jaigarh LNG terminal to open in July 2021|
|Source: Ministry of Petroleum and Natural Gas, India|