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Hindustan Petroleum’s Chhara LNG Terminal to Start Operations in October After Delays

Hindustan Petroleum's Chhara LNG Terminal to Start Operations in October After Delays

Hindustan Petroleum’s Chhara LNG Terminal to Start Operations in October After Delays

Hindustan Petroleum Corporation Limited (HPCL), an Indian state-owned oil refiner, is gearing up to begin operations at its new liquefied natural gas (LNG) import terminal in Chhara, Gujarat by October 2024. This comes after facing delays in commissioning due to challenges during the first LNG cargo unloading attempt last month.

The initial hiccup occurred when a vessel named “Maran Gas Mystras” carrying 160,000 cubic meters of LNG arrived in mid-April. Rough seas exceeding permissible limits prevented safe unloading. The official explanation attributed this to “swell in the rough sea beyond the permittable limit.”

Furthermore, the upcoming monsoon season in India necessitates shutting down the terminal from mid-May to mid-September. However, HPCL remains optimistic about operational readiness by October. This confidence stems from the completion of a 40-kilometer pipeline connecting the Chhara terminal to Gundala village in Gujarat. This pipeline extends further for another 46.6 kilometres, integrating with Gujarat State Petronet’s city gas distribution network that reaches Somnath district.

The initial attempt to unload LNG in April turned out to be a frustrating experience. The vessel struggled to achieve a stable mooring position due to bad weather and the absence of a breakwater facility at the terminal. This resulted in the vessel being stranded for over a week. According to sources, the rough conditions caused the ship to bump against the fenders (protective cushions between the ship and the dock), damaging them. Nearly five loading arms were also broken during the process, leading to the complete abandonment of the unloading operation on April 18th.

Breakwaters are structures built to provide protection from waves and create calmer waters for the safe berthing of ships. Recognizing this need, HPCL is currently constructing a breakwater facility at the Chhara terminal. While a specific completion date hasn’t been announced, its presence will allow the terminal to function throughout the year.

In mid-April, an LNG vessel arrived at the terminal but faced challenges in mooring due to bad weather and the absence of a breakwater facility. Rough sea conditions caused the vessel to hit the fenders, resulting in damage to almost five loading arms. Eventually, the operation was abandoned on April 18.

Fenders act as buffers between the ship hull and the dock to prevent damage during contact. HPCL is constructing a breakwater facility at the terminal to ensure safe berthing of LNG tankers during India’s monsoon season. There’s no specific timeline provided for its completion, but once finished, the terminal can operate year-round.

Indian Oil Corporation (IOC), another state-controlled refiner, brought in the distressed vessel through a tender seeking approximately 80 million cubic meters of regasified LNG for delivery to the Dahej terminal at around $8.40 per million British thermal units (Btu) on a delivered ex-ship basis.

The initial LNG cargo for the Chhara terminal was part of a tender issued by another Indian state-controlled refiner, Indian Oil Corporation (IOC). They were seeking 80 million cubic meters of regasified LNG for delivery to their existing 17.5 million tonnes per year Dahej terminal, with a price of around $8.40 per million British thermal units (equivalent to desalinated water).

HPCL, on the other hand, has yet to finalize a separate tender for another LNG cargo delivery targeted for early May. This tender closed on April 19th, 2024.

The Chhara LNG terminal’s commissioning has faced delays since September 2022 due to pipeline-related issues. Once operational, it will become India’s eighth LNG import facility, boosting the country’s total regasification capacity from the current 47.7 million tonnes per year to 52.7 million tonnes per year. This signifies a significant step towards India’s goal of increasing the share of natural gas in its overall energy mix.

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