Andhra Pradesh Gas Distribution Corporation Limited
GAIL Gas Limited signed a Share Holders Agreement (SHA) with Andhra Pradesh Gas Infrastructure Corporation Limited (APGIC) and Andhra Pradesh Gas Distribution Corporation Limited (APGDC) in September 2011 for restructuring of APGDC which will pursue city gas distribution opportunities in the state. GAIL Gas and APGIC holds 25 per cent equity each in the company. The balance 50 per cent equity has been kept for strategic partners, financial institutions and other private/public participants. The company plans to make use of the abundant natural gas resources available in the Krishna Godavari Basin and to create the necessary CGD infrastructure to utilize these resources for the benefit of industry, transport and domestic sector in state. The scope of business of the company includes creating natural gas infrastructure in industrial estates, areas and clusters, developing distribution infrastructure downstream of trunk lines, promoting natural gas applications in various sectors and setting up City Gas Distribution networks to supply environment friendly, economical and convenient fuel compressed natural gas (CNG) to vehicles and piped natural gas (PNG) to households, commercial establishments and industries.
A Project Framework Agreement (PFA) was signed between APGDC with GDF Suez LNG UK Ltd. for jointly setting up a Floating Storage and Regasification Unit (FSRU) in offshore Andhra Pradesh on 17th April, 2012. The Project Framework Agreement was signed in the presence of Shri S. Jaipal Reddy, Hon’ble Minister of Petroleum and Natural Gas, Government of India and Shri N. Kiran Kumar Reddy, Hon'ble Chief Minister of Andhra Pradesh. Mr. B C Tripathi, Chairman & Managing Director, GAIL (India) Limited, Mr. Sutirtha Bhattacharya, Principal Secretary, Infrastructure and Investment, Government of Andhra Pradesh, Mr. Philip Olivier, President & CEO, GDF Suez LNG UK, Mr. S Narayan, MD APGDC and other senior officials from GAIL, APGDC, GAIL Gas Limited, GDF Suez UK LNG and APGIC also graced the occasion.
APGDC has been mandated to establish an LNG importation facility in the coast of Andhra Pradesh so as to narrow the gap between demand and supply position and in the context of restricted availability of gas in the state of Andhra Pradesh and consequential underutilization of infrastructure especially in the power sector. Implementation of the FSRU project assumes great significance as the same can be set up in relatively short period of time as compared to a conventional on land LNG terminal.
In order to implement the project efficiently and effectively, APGDC decided to induct a strategic partner, who has prior experience of developing such projects and would provide technical expertise for the project. APGDC had undertaken an international competitive bidding for selection of strategic partner for conducting a detailed feasibility study and subsequent formation of a Special Purpose Vehicle for developing the FSRU project. GdF Suez LNG UK Ltd. has been selected as the strategic partner. The selection process was designed and coordinated by M/s. KPMG and the evaluation was undertaken by experts from IIT, Chennai and Indian Port Authority (IPA) and representatives from GAIL and Government of Andhra Pradesh.
Under the PFA, APGDC and GdF Suez shall jointly conduct a feasibility study and target commissioning of the FSRU project by the end of 2013.
GdF Suez is Europe’s largest importer of LNG and is very well diversified along the entire hydrocarbon value chain covering upstream E&P, LNG liquefaction, LNG shipping, LNG regasification, pipelines, city gas distribution etc.
FSRU is a faster and low cost solution for LNG importation. This is the first of its kind in India With the commissioning of the FSRU project in Andhra Pradesh, gas consumption in the State would get a boost and the downstream activities are expected to significantly contribute to the State’s economic growth.