Netherland’s energy major, Shell and Anil Ambani's Reliance Power have announced that the two companies will jointly develop a floating facility for importing gas from ships off the coast of Kakinada in Andhra Pradesh by the year 2014.
The two companies have also tied up with Kakinada port that could help the project get easy access to landfall point for connecting the pipes from the floating facility with the Mukesh Ambani's pipeline for transporting gas. The association with the part will help the project in many ways and will also give it advantage over a similar project by GAIL and GDF Suez of France.
The two companies said that the facility will bet set up with a capacity of 5 million tonnes of liquid gas (LNG or liquefied natural gas) per annum, which will be increased to as much as 10 million tones in the future.
The Kakinada LNG terminal of the venture will allow the companies to provide supplies in a market that is facing shortfall due to falling output from Reliance Industries' field in the Krishna-Godavari basin. Reliance Power will also be able to get assured supply for its gas-fired power project at Samalkot in the state.