Real-estate giant Hiranandani Group outfit H-Energy is embarking on an ambitious integrated project to source and market liquefied natural gas to consumers in India and Bangladesh via a pipeline.

“If all stars align, we will start construction of the four million tonne floating storage and re-gassification unit (FRSU) off Bengal in August,” Darshan Hiranandani, managing director, Hiranandani Group of Companies, told BusinessLine in an exclusive interview.

The ₹2,400-crore project will take 36 months to complete and have 26 per cent equity participation by Excelerate Energy of the US, he said.

Cross-border marketing



A new concept for India, H-Energy is planning the facility as neither the Kolkata nor the Haldia port has the draft to accommodate large LNG carriers.

But, what makes the project unique is its marketing plan. Riding on the regional cooperation iified-LNG (R-LNG) to energy-starved Bangladesh. Dhaka was offered the option of bringing its own gas at the H-Energy-run terminal and then moving it via a pipeline. But, Bangladesh preferred to source it on long-term — “close to 20-year” — basis from H-Energy.

Bangladesh has 11,476 MW generation capacity of which nearly a third runs on costly fuel oil and 8 per cent on diesel. Though Dhaka is building an LNG terminal at Maheshkhali islands near Chittagong, the gas cannot be supplied to the south-eastern border areas, across the Padma river, due to logistics issues.

Pipeline project

H-Energy wants to fill this gap. “We have tied up with a state-run power station in Khulna that will buy one million tonnes of R-LNG annually,” Hiranandani said. The Hiranandani project will also supply to consumers in West Bengal and Odisha. H-Energy has submitted an expression of interest to the downstream gas regulator (PNGRB) for setting up a 705-km trunk pipeline at a cost of ₹2,700 crore. The pipeline will have two wings — one stretching to Duttaphulia on the West Bengal-Bangladesh border in Nadia district and the other extending to Odisha.

From Duttaphulia, a spur line will connect to the Bangladeshi gas grid at Jessore. The plan has received the green signal from the External Affairs Ministry.

Including the spur lines, the pipeline will run to nearly 900 km and will bypass populated areas to avoid land acquisition issues. It will connect all major consumption centres and ports (including Dhamra and Paradip).

But is there interest in gas in a coal country? With no clean fuel option in the region, Hiranandani expects the project to give a push to the city-gas distribution agenda. But, H-Energy is yet to decide about entering the CGD vertical. Right now, the company’s focus is on February 24 bidding for the pipeline. Hiranandani expects “at least four parties, including H-Energy” to bid for it.

Boost for Bengal



Hiranandani’s plans, if it comes true, will be a boost to Mamata Banerjee government’s industrialisation agenda. Since coming to power, the Trinamool Congress government only recently received the first major investment — a cement plant by Sajjan Jindal’s JSW group. As the LNG project, which will make gas available easily, is expected to bring in new investments to the region, the State government is backing it, especially with land acquisition. The Hiranandani Group had started exploring the LNG terminal idea when the Left Front was in power. At that time, GAIL (India) had also committed to connecting Haldia with the national gas grid at Jagdishpur in UP. The Left Front lost the 2011 elections to the TMC, and the Jagdishpur-Haldia pipeline project also did not take off.

Now, the Hiranandani Group has changed its plan, expanding its scope.