A significant step in India’s energy infrastructure development was announced recently, as Pipeline Infrastructure Ltd (PIL) and Crown LNG Holdings Ltd formalized an agreement to establish crucial pipeline connectivity in Kakinada, Andhra Pradesh. The Memorandum of Understanding (MoU) was officially signed a few days ago, specifically on July 10, by Akhil Mehrotra, PIL’s Managing Director, and Swapan Kataria, CEO of Crown LNG Holdings Ltd.
The agreement focuses on establishing connectivity between Crown LNG’s proposed 7.2 million tonnes a year Gravity-based Structure and Regasification Unit (GBSRU) at Kakinada and PIL’s existing pipeline. This connection is subject to various terms and conditions. PIL, a special-purpose vehicle owned by Energy Infrastructure Trust, operates a substantial 1,400-kilometer pipeline that spans from Kakinada on the east coast to Bharuch in Gujarat on the west. This extensive network is currently utilized by major energy players, including Reliance Industries Ltd, for transporting domestically produced natural gas from offshore fields to various industrial and residential users across the nation.
With this new MoU, the existing PIL pipeline will also be utilized by Crown LNG for the transportation of imported liquefied natural gas (LNG). This strategic collaboration is expected to significantly boost the utilization of PIL’s pipeline network by introducing additional gas volumes.
The tie-in connectivity offers Crown LNG a vital evacuation solution directly from its regasification unit, which is strategically located in close proximity to PIL’s injection point in Kakinada. This ensures the efficient delivery of natural gas to key demand centers across India.
Specifically, this link is projected to facilitate the evacuation of approximately 25 million standard cubic meters of gas per day from the terminal through the PIL pipeline, providing Crown LNG and its customers seamless access to the energy markets in western and northern India.
Crown LNG is operating in India through its wholly-owned subsidiary Krishna Godavari LNG Terminal Pvt Ltd, aims to enhance India’s energy security and market reach through such projects. The company recently became a US publicly listed entity and, earlier this year, signed an MoU with the Indian Gas Exchange to cooperate on LNG sales, further solidifying its market strategy. The Kakinada terminal project is estimated to cost around USD 1 billion.
Crown LNG plans to commence construction of the terminal next year, in 2026, and is currently in the process of finalizing contracts with key suppliers. The terminal is anticipated to be completed within four years from the date of the MoU, aligning with the broader national push for enhanced gas infrastructure. Both parties have committed to working closely to ensure the pipeline connectivity aligns perfectly with the project’s development timeline, ensuring synchronized execution and operational readiness.
Source: PTI