Bhubaneswar, Oct 26 (IANS): Paradip Port Trust Saturday inked an initial pact with public sector pipeline operator GAIL (India) for setting up a liquefied natural gas terminal at Paradip at a joint investment of Rs.3,108 crore, officials said.

Sudhansu Sekhar Mishra, port chairman, and Sanjeev Dutta, executive director of GAIL, signed the memorandum of understanding at ceremony here in the presence of Union Minister of Shipping G.K.Vasan.

GAIL wants to set up the project with a send-out capacity of 4.8 million tonne per annum in phase one by 2017 with a storage capacity of 170,000 cubic metre.

This will entail a total investment of Rs.3,108 crore out of which Paradip Port would invest Rs.650 crore in breakwater and dredging, and the balance Rs.2,458 crore would be invested by GAIL, Mishra told IANS.

Considering the long-term potential of the market along the East Coast, it is likely that phase two of the project will also have an additional capacity of nearly five million tonnes per annum, which will make overall terminal capacity as 8-10 million tonnes per annum, he said.

The shipping ministry aims to create a port capacity of around 3,200 million tonnes by attracting investments to the tune of Rs.287,000 crore to handle the expected traffic of about 2,500 million tonnes by 2020, Vasan said.

The government aims to bring out Indian ports on par with the best international ports in terms of performance and capacity, he added.

Paradip Port in the coastal district of Jagatsinghpur in Odisha, about 100 km from state capital Bhubaneswar, is one of the major ports of India serving the eastern and central parts of the country.