India’s Bharat Petroleum Corporation (BPCL) is pressing ahead with its $240 million liquefied natural gas floating storage and regasification unit project at Krishnapatnam in Andhra Pradesh on the nation’s east coast, writes Amanda Battersby.

The FSRU, which could be commissioned in 2022, will be the sixth LNG import project in India.

The floater will have initial capacity of 1 million tonnes per annum but plans are already under consideration to boost capacity in the future.

"We have plans to scale up the initial capacity to 3 million tonnes or 5 million tonnes later on," said BPCL chairman D Rajkumar.

The project is being undertaken by BPCL subsidiary Bharat Gas Resources (BGRL), a company in which compatriot Petronet LNG has a minority 26% interest.

Earlier this year, Anadarko Petroleum — subsequently acquired by Occidental Petroleum — signed a deal with BGRL for the supply of 1 million tpa of LNG from Mozambique for 15 years, which could flow to the FSRU to be deployed at Krishnapatnam’s deep-water port.

The first FSRU import terminal in India, H-Energy’s Jaigarh project in Maharashtra on the west coast, is now targeting operational start-up in the fourth quarter of 2019, one year behind schedule.

Minister of Petroleum & Natural Gas Dharmendra Pradhan last week said that India might look to again renegotiate its long-term LNG purchase contracts at an “appropriate time” given that spot cargo prices are depressed.

India imports 8.5 million tpa from Qatar under two long-term deals. Indian buyers have also contracted to take a further 5.8 million tpa from the US, 2.5 million tpa from Russia and 1.44 million tpa from Australia.

One source suggested that India’s term volumes from Qatar were today costing customers more than double what they would be currently paying on the spot market.

India’s LNG import capacity is expected to increase to 52.5 million tonnes by 2023 as new receiving and regasification facilities including those planned at Dhamra, Chhara and Kakinada start up.

The country is aiming to boost to 15% the share of gas in its energy mix by 2030.

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Bharat to press on for FSRU