Indian Oil Corporation (IOC), India’s largest state-run oil marketing company, will supply liquefied natural gas (LNG) to the Andaman and Nicobar Islands’ first-ever gas-based power plant. The plant, to be established by state-owned NTPC, marks a significant shift towards sustainable energy in the remote island territory. As per Moneycontrol news, Indian Oil is actively working with stakeholders to build the necessary LNG infrastructure in support of NTPC’s initiative.
The 50 MW gas-based power plant will be set up in South Andaman and Great Nicobar, with a planned commissioning by 2027-28. Prime Minister Narendra Modi had laid the foundation stone for the project back in December 2018. Currently, NTPC is in the process of acquiring land in the region for the facility.
“The company (NTPC) is looking for land currently. It is in talks with the concerned (government) organisations. The plant is expected to be commissioned by 2027-28,” Moneycontrol reported.
The new plant is part of India’s broader vision to transition to cleaner energy sources. The central government has set a target of raising natural gas’ share in the country’s energy mix to 15% by 2030, from the current 6%. The Andaman & Nicobar Islands, which presently depend entirely on diesel for electricity, are expected to significantly benefit from this transition.
IOC currently has a strong footprint in the Andaman & Nicobar Islands and is the sole provider of petroleum products in the region. These include diesel, petrol, LPG, low sulphur high flash high speed diesel (LSHF HSD) for naval use, and aviation turbine fuel (ATF). Other public sector oil marketing companies like Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) have no operational presence in the area.
Indian Oil reported that diesel continues to be the most-consumed fuel on the islands, largely used for power generation. Diesel demand grew by 1.41% in FY25, reaching 1.43 lakh kilolitres, with electricity generation accounting for approximately 70% of terminal diesel usage.
Petrol and LSHF HSD registered year-on-year growths of 6% and 24%, respectively. However, demand for ATF declined by 5.43% during the same period. LPG consumption rose by 3%, with IOC’s bottling plant supplying 12,731 metric tonnes in FY25. The plant has an annual capacity of 15 thousand metric tonnes.
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The collaboration between IOC and NTPC to bring LNG-based power to the Andaman & Nicobar Islands is a crucial step towards reducing diesel dependency and aligning with India’s energy transition goals. With its exclusive operations in the islands and robust fuel supply infrastructure, Indian Oil is well-positioned to play a pivotal role in this green energy transformation.
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Published on: Jun 18, 2025, 1:35 PM IST
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