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GAIL readies new LNG terminal in Bhubaneswar

The gas distribution company’s innovative model may possibly get replicated by other local gas distributors keen to start off supply in new licence areas where gas pipelines have not reached

GAIL readies new LNG terminal in Bhubaneswar

New Delhi: State-owned Gas Authority of India Ltd (GAIL) has readied a satellite liquefied natural gas (LNG) terminal in Bhubaneswar to supply natural gas to local customers in the absence of a gas pipeline. The gas distribution company’s innovative model may, however, get replicated by other local gas distributors keen to start off supply in new licence areas where gas pipelines have not reached.

70% population to be covered

In recent years, city gas licences in India have grown rapidly, with the downstream regulator offering 86 licences last year, while the process to award another 50 is in process. Only a year back, licences were limited to 92 geographical areas covering just a fifth of India’s population. However, 70 percent of the country’s population is set to be covered after the current round of licensing is complete in the coming two months. Last year, GAIL, which has a licence to supply gas to the city, decided to start using gas cascades to supply natural gas to homes, vehicles and shops. But the gas distribution company switched its supply method last month by operating a satellite LNG storage and regasification terminal in Bhubaneswar, which can cater to 3,000 compressed natural gas (CNG) vehicles and 1,000 homes.

First such operation in India

This operation will be the first-of-its-kind for India, although satellite LNG terminals are common in several other countries. GAIL’s terminal contains two verticals tanks of 20 kilolitres each, and low-pressure vaporiser to supply gas to homes, along with high-pressure vaporisers for CNG vehicles. “This is a short-term arrangement until the Urja Ganga gas pipeline reaches Bhubaneswar. Using LNG station is better than using gas cascades as the latter involves higher transportation cost and increased delivery uncertainty,” a GAIL executive said.