Indian state Gujarat approves LoI for CNG terminal in Bhavnagar

India’s Gujarat Government has approved a letter of intent (LoI) for the development of a compressed natural gas (CNG) terminal with an investment of Rs19bn (approximately $260m) at the Bhavnagar port in the state.

The approval, given by Gujarat Chief Minister Vijaybhai Rupani, paves the way for the terminal to become the world’s first CNG terminal.

In November last year, the Gujarat Chief Minister granted permission in principle for developing the CNG Terminal port project.

Companies such as UK-based Foresight Group, Padmanabh Mafatlal Group, and Netherlands-based Boskalis have received government permission to serve as the developers of the CNG storage project.

The CNG terminal in Bhavnagar is planned to be built in multiple phases, the first of which is estimated to cost Rs13bn (approximately $180m).

It will have the capacity to handle 1.5 million tonnes per annum (Mtpa) of cargo. It will also have a liquid cargo terminal with a capacity of 4.5Mtpa, a container and white cargo terminal, and a roll-on/roll-off (RORO) terminal.

The consortium of developers will start preparing a detailed project report and will work towards obtaining environmental approval.

These processes are expected to take nearly 18 months, following which construction work at the site will be completed in three years.

The Gujarat government said in a statement: “At present, the Bhavnagar port is managed by the Gujarat Maritime Board and handling three million metric tonnes of cargo per year. With the completion of the CNG Terminal, the cargo handling capacity of the Bhavnagar port will become nine million metric tonnes per annum.

“It should be significant to mention here that Bhavnagar has connectivity of the Broad-gauge Railways and National Highways too. As a result, the benefits of CNG terminal in transporting the goods will also be available to northern and western regions of the country.”

In February last year, India’s Petroleum and Natural Gas Regulatory Board (PNGRB) received as many as 225 bids for gas licences covering 50 cities in the city gas distribution (CGD) bidding round.