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Riding on a high growth trajectory, Gujarat’s ports sector is set to undergo a major transformation with surging demand for imported liquefied natural gas (LNG) in the country. The growing need for energy across sectors mainly in the city gas distribution (CGD) and other consuming industries, has prompted a shift in the pattern of cargo handling at Gujarat ports from dry bulk cargo to LNG.
Known for its numero uno position in the LNG space with two operational LNG terminals with combined handling capacity of almost 15 million tonnes per annum (mtpa), Gujarat is aggressively ramping up its capacities with one more 5-mtpa LNG terminal being set up by GSPC LNG Ltd — a joint venture between State-run Gujarat State Petroleum Corporation (GSPC) and Adani Group — at Mundra in Kutch.
The State will be the first in the country to set up a floating regasification unit (FSRU) with capacity of 10 mtpa at Jafrabad in Amreli district by Swan Energy Ltd (SEL) in association with Exmar NV of Belgium. The estimated cost of the project is about 4,000 crore.
While the GSPC LNG terminal is likely to be commissioned soon, the FSRU for Jafrabad is currently under construction at Hyundai Heavy Industries (HHI)’s shipyard in South Korea. The unit is expected to be delivered by end-2019 and will become operational by early 2020.
Looking at the rapidly growing gas market in India, it is expected that the share of natural gas in the overall energy consumption will increase to 20 per cent by 2030, from about 6-6.5 per cent now.
The existing two LNG terminals at Gujarat have contributed in setting the foundation for a gas-based economy in the country. Operated by Hazira Port Pvt Ltd — a joint venture between Shell Gas BV and Total Gaz Electricite Holdings, France — the 5-mtpa Hazira LNG terminal was commissioned in 2005.
Subsequently, in 2009, the Dahej terminal was commissioned and is being operated by Petronet LNG with a capacity of 10 mtpa. The terminal assumes crucial importance as it meets about 20 per cent of the country’s total gas demand.
As a planned expansion, a second LNG terminal at Dahej is also envisaged by the company to be able to berth higher capacity Q-Max and Q-Flex LNG vessels.
Besides the natural advantage of having the longest coastline of over 1,600 km, Gujarat is strategically located to easily connect key markets such as West Asia, Africa and Europe — three of India’s biggest trading partners.
Private players gung-ho
From the private players’ view, the largest ports developer and operator in India — Adani Ports and Special Economic Zone Ltd (APSEZ) — houses three of its 10 strategically located ports and terminals. These include Mundra port in Kutch — the largest private port in India — Hazira in Surat and Dahej in Bharuch in south Gujarat.
The Adani Group says, “Mundra is also one of the few ports with handling and storage facilities for crude oil, containers, dry bulk, break bulk, automobiles and liquid cargo. The deep-draft port with 24 berths and two single-point moorings can handle 4 million TEUs and the capability of berthing the largest container vessels calling at Indian ports.
Dahej’s strengths include a deep-draft multi-cargo port, in the Gulf of Khambhat, on the Narmada estuary near Bharuch, Gujarat. With two berths, the port has a capacity to handle 20 mtpa of cargo comprising coal, silica sand, rock phosphate, steel products and project cargo. It also has India’s first high-speed, elevated triangular gallery overland conveying system for coal transportation, which reduces dust pollution.
The port at Hazira is a deep-draft facility near the diamond trading city of Surat, Gujarat. It is strategically located to allow global container operators to take advantage of the proposed Delhi-Mumbai Industrial Corridor. The port’s sophisticated handling and storage facilities, and capacity to handle 35 mpta, allow it to process multiple types of cargo.
In its outlook for FY2019, the APSEZ expects to cross 200 mt while Mundra is expected to record high single-digit growth.
“There has been a strategic thrust towards improving maritime infrastructure with a slew of structural reforms by the government. In March, a revised Model Concession Agreement (MCA) was approved to make port projects more investor-friendly and attract global capital. Among major plans, the Shipping Ministry aims to develop 10 coastal economic regions as part of its long-term endeavour to revive the country’s Sagarmala (string of ports) project.
Under the Sagarmala Programme, the government has envisioned a total of 189 projects for modernisation of ports involving an investment of 1.42 lakh crore by 2035. Of these, projects worth $10 billion have been identified and will be awarded over the coming five years, the Adani Group said.
From the ambitious Sagarmala project, the Government of Gujarat is actively looking to leverage the benefits by strengthening the maritime infrastructure of the State.
The State government-listed several major projects are proposed to be included under the Sagarmala initiative. These include the Development of Maritime University in Gujarat, Development of Maritime Cluster, Ro-Ro and Ro-Pax Ferry Services and Training programmes for skill development and capacity building of workers involved in ship recycling activities.
The Gujarat Ports Infrastructure and Development Company Ltd (GPIDCL) has also signed a tripartite MoU with Ministry of Shipping and Indian Ports Association for knowledge sharing, as part of the Sagarmala initiative.
For the Ro-Ro ferry service, a pilot project of the service between Dahej and Gogha has been completed. The first phase of the Gogha-Dahej Ro-Ro ferry service was launched on October 22, 2017. It connects South Gujarat and Saurashtra by reducing the travel time from nine hours to one hour.
What creates future opportunities for the ports sector in Gujarat is yet another ambitious project of Integrated Maritime Complex proposed to be set up in Central Gujarat. The in-principle approval for the project, which is likely to cost around 15,000 crore, has been received for coal and multi-purpose captive jetties.
The project aims to integrate and synchronise shipyard, port and industrial development. For the shipyard, it is proposed to repair about 309 ships per year, with proposed shipbuilding capacity of 20 ships per annum. The captive jetties will include LNG terminals as well, while a multi-product Special Economic Zone or Free Trade Warehousing Zone is planned to house shipbuilding ancillary industries, steel industries and power projects with a logistics hub.
The future projects underline the significance of the ports sector in Gujarat and promise to unlock the next level of growth for the State.
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