ADB to give $150 mn loan to Petronet for Dahej LNG terminal expansion

New Delhi, 17 December 2013

Asian Development Bank (ADB) today said it will provide USD 150 million loan (about Rs 915 crore) to Petronet LNG Ltd to part finance expansion of its Dahej LNG import terminal in Gujarat.

Petronet, the nation’s largest importer of gas in its liquid form (liquefied natural gas or LNG), is expanding its 10 million tonne per annum Dahej terminal to 15 million tonnes at an estimated cost of about Rs 2,950 crore by end 2016.

ADB will provide a USD 150 million loan to Petronet to increase the capacity of Dahej LNG terminal “to help reduce the unmet energy demand in the country, which has been one of the major constraints for efficient economic growth,” the multilateral lending agency said in a statement.

“The expanded terminal will help India move toward its target of greater natural gas use, thereby enhancing its energy security and shifting to cleaner forms of energy,” said Siddhartha Shah, Principal Investment Specialist at ADB’s Private Sector Operations Department.

“The project will help meet demand for compressed natural gas for transportation, piped gas to households, fuel for gas power plants, and feedstock for fertilizer plants, mostly in north and west India,” ADB said.

The additional supply will translate to a reduction in the emission of around 3.15 million tonnes of carbon dioxide every year, it said.

ADB helped finance Petronet’s first terminal through an equity investment in January 2004. It also financed the first expansion by providing a loan syndicated through a partial credit guarantee from a German development agency.

It still holds 5.2 per cent stake in Petronet.

Petronet also owns a 5-million tonnes a year LNG import facility at Kochi in Kerala and is building a similar capacity terminal at Gangavaram in the east coast by 2016.

Petronet commissioned the Dahej facility with 5 million tonnes per annum capacity in 2004 and doubled the capacity to 10 mt in 2009. It is now expanding it further to 15 million tonnes per annum at an estimated cost of about Rs 2,950 crore.