Downstream gas company Atlantic Gulf & Pacific of Manila (AG&P) has started building a liquefied natural gas (LNG) terminal in south India with a capacity of 1,000,000 tonnes per year.

The Karaikal terminal is hoping to start operation by Q4 2021. When finished, it will service the whole of South India around the clock.

The terminal will be the only one with deep-water access on India’s east coast, 280km south of Chennai. Planned facilities include onshore truck loading and a floating storage unit on long-term loan from the logistics arm of the Abu Dhabi National Oil Company (ADNOC L&S).

The terminal is close to manufacturing clusters in Tamil Nadu. It will provide gas to power plants industries and commercial consumers there and within 300km.

AG&P CEO JM Sigelman said: “[… The terminal] is ideally suited for the Karaikal Port, a critical centre of trade. […] Karaikal LNG is a cornerstone project for Pondicherry, Tamil Nadu and Karnataka that will provide clean, affordable fuel.”

President of AG&P terminals and logistics Karthik Sathyamoorthy said: “With the addition of AG&P’s LNG import terminal, the Karaikal Port will become a gateway for the delivery of cleaner and lower-cost fuel to downstream demand centres that are unable to access natural gas today.

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“Our goal is to bring down the unit cost of regasification terminals for smaller volumes to make LNG commercially viable for scattered and smaller customers.

“We will achieve this at Karaikal through the unique solution we are implementing with our partners such as ADNOC L&S.”

AG&P CFO and chief commercial officer Abhilesh Gupta said: “Karaikal LNG will play a crucial role in the GDP of Southeast India. Karaikal LNG is a vital infrastructure project that will provide a substantial boost to the region’s economy.

“It will help improve the socio-economic conditions of communities within a few hundred kilometres’ radius through local employment and the development of industries via reliable and affordable access to natural gas and LNG.”