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Engie and Shell exit Kakinada LNG project (India)

Shell and Engie have decided to exit the Kakinada LNG project in Andhra Pradesh (India), in which they held 26% each, due to concerns about demand for imported gas in India. The companies were seeking a minimum sale level of LNG before making an investment decision but failed to secure it, due to the reluctance of power plants to buy imported gas.



The project is developed by APGDC, a joint venture of GAIL and Andhra Pradesh Gas Infrastructure Corp, with 48%, Shell and Engie (26% each), and signed an agreement with the government of Andhra Pradesh for a 3.5 Mt/year Floating Storage and Regasification Unit (FSRU), expandable to 5 Mt/year. Partners also signed an agreement to cover LNG sourcing and to market the regasified gas.



Following the withdrawal of Engie and Shell, GAIL will negotiate with the Andhra Pradesh government on the potential structure of the project.

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