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IndianOil signs MoU to set up Indian LNG terminal

LNG Industry,

IndianOil has signed a MoU with Tamil Nadu Industrial Development Corporation Ltd (TIDCO) to set up an LNG regasification terminal and gas-based power plant at Ennore and gas pipelines for distribution.

This MoU encompasses setting up a 2.5 million tpa LNG terminal, which is expandable to 5 million tpa, which will cost approximately Rs.3000 Crore (£407 million).

A 1000 MW LNG based power plant that is likely to cost around Rs.5000 Crore (£679 million) will be fed by the terminal and will be built adjacent to the terminal. Driven by the LNG regasification terminal and gas-based power plant, Ennore will become a Special Economic Zone that will spawn a grid of gas pipelines criss-crossing the demand centres across Tamil Nadu and other Southern States. This will spur city gas distribution and boost industrial activity in the region. The Ennore gas terminal is expected to be commissioned by the year 2015.

India is facing a growing energy crisis due to its rapidly expanding population. India is not blessed with large mineral reserves and must import most of its oil and coal; this terminal should hopefully help redress the balance and spur industrial growth.

Under the MoU, IndianOil and TIDCO will jointly set up the LNG import and regasification terminal including marine facilities, LNG based power plants, gas grid in Tamil Nadu, in addition to participating in city gas distribution business in the state of Tamil Nadu with total investment of around Rs.10,000 Crore (£1.4 billion).

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