The state government of Andhra Pradesh has given the nod to Petronet LNG to set up its first liquefied natural gas regasification terminal on India's eastern coast.
India's largest LNG player Petronet plans to construct a 5 million-tonnes-per-annum (tpa) onshore terminal at the Gangavaram port, which is likely to be operational in three or four years.
The crucial approval by the Andhra Pradesh government could pave the way for construction of the LNG terminal.
The state government order claimed that it has consulted various government departments before giving a green light for the LNG project, the Press Trust of India reported.
"Government, after detailed examination of the proposal in consultation with Law and Finance Departments and keeping in view the recommendations of the Empowered Group of Ministers, hereby accord approval to Gangavaram Port Limited for establishing LNG Terminal at Gangavaram Port," the order by the state government claimed.
Once commissioned, Gangavaram would be Petronet's third regasification facility in India.
Petronet is presently operating a 10 million tpa terminal at Dahej in Gujarat and a 5 million tpa facility at Kochi, both off the country's western coast.
The proposed Gangavaram facility could give Petronet a strategic presence in the east coast market, which faces acute gas shortfall, due to a slump in gas production from the D6 deep-water block.