Economy
Crown LNG bets on enhanced India-US energy ties; to scale up India operations
Summary
Crown LNG is setting up an offshore terminal in Kakinada and potentially another in Haldia. The company aims to benefit from growing US-India energy trade, with an initial capacity of 4 million tonnes and a project cost of $1.1-$1.2 billion.New Delhi: Crown LNG, a Nasdaq-listed LNG infrastructure company, is looking at accelerating and expanding its operations in India to leverage the prospects of the growing energy trade between the South Asian country and the US, co-founder and CEO Swapan Kataria said.
The company, with expertise in gravity-based structures for offshore LNG terminals, is building an offshore terminal along the coast of Kakinada in Andhra Pradesh and is considering setting up another in Haldia in West Bengal, Kataria said in an interview to Mint.
Crown is counting on increased energy trade between the US and India after US President Donald Trump said during Prime Minister Narendra Modi’s recent visit to Washington that his country would emerge as the top energy supplier to India.
“I think it's a very happy marriage between ‘Drill, baby, drill’ and ‘Build, baby, build’ because that's what India needs," Kataria said, referencing remarks made by Trump (on drilling for more oil) and UK Prime Minister Keir Starmer (on building mini-nuclear power stations), respectively.
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Kataria noted that with Trump coming in, the expectations are that there would be more oil and natural gas in the market, and this will lead to additional infrastructure projects being developed for these commodities and higher exports from the US.
While the US is the fifth-largest supplier of oil to India, it stands second in terms of LNG supplies. It sold LNG worth $2.15 billion to India so far in FY25 (April-November).
Crown plans to start construction of an LNG export plant in the US before Trump's second term ends in 2029, Reuters reported in November, citing Kataria.
"So, we are now starting on a 10 million tonne export licensing development in the US we have just announced about 5-6 months back. Now we're just finalizing the site. Once we finalize the site, we will next go to the supply arrangements of gas," Kataria told Mint.
Harsh-weather facility
India, the world’s third-largest energy consumer, wants to leverage the use of LNG as a fuel in order to lower carbon dioxide emissions and increase the share of natural gas in the primary energy mix to 15% by 2030. The government has identified LNG as a transport fuel that can help reduce vehicular pollution and import bills.
In India, Crown is looking at completing an initial capacity of 4 million tonnes at the Kakinada LNG terminal and eventually increasing it to 7.2 million tonnes. The project is licensed to operate 365 days a year, a first for the harsh weather-prone area. The company plans to import LNG from the US.
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"We are now fully licensed and… basically, negotiating with various users who need to bring gas from different parts of the world and need access to the east coast of India, and that's what we are trying to do now – bring our project to the FID (final investment decision) stage. Our goal is that we should be able to break ground within next year. The total capex for the project is somewhere between $1.1 billion and $1.2 billion. Once this project comes up, it will still be very competitive because it has a life expectancy of 40 to 50 years," Kataria said.
The Crown LNG CEO said although the company is well-capitalized and does not require funds for the Kakinada project, it is open to investments.
"There are a couple of users who we are discussing with. They want to book capacity with our terminal only if they get a right to invest in it. So, we don't need it, but we are probably going to get forced into some of these," he said. “So, we are carving out a process in which they will be able to invest if they want to," he said.
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On the company's expansion plans in India, Kataria said Crown is considering setting up a similar offshore terminal in Haldia and depending on demand, a final decision may be taken over the likely investment by the end of 2025.
"I would certainly hope it happens by the end of this year. We are doing a lot of research right now," he said.
If the plan to set up a terminal in Haldia takes shape, the required investment is projected to be in the range of $900 million to $1 billion and it may have a capacity of about 5 million tonnes.
