Sri Vijaya Puram, July 22: The implementation of the 50 MW Liquefied Natural Gas (LNG)-based power project at Hope Town moved a major step forward after the Ministry of Power approved the Power Purchase Agreement (PPA) and Gas Supply Agreement (GSA), followed by the signing of key project agreements between the Andaman and Nicobar Administration, NTPC Vidyut Vyapar Nigam Limited (NVVN) and Indian Oil Corporation Limited (IOCL). The project is expected to strengthen long-term energy security, reduce dependence on diesel-based power generation and improve electricity reliability across the Islands.
The Ministry of Power, Government of India, accorded approval for the PPA and GSA on June 16, 2026, paving the way for execution of the project. The PPA and Land Use Right Agreement (LURA) between the Electricity Department of the Andaman and Nicobar Administration and NVVN, along with the Gas Supply Agreement between NTPC and IOCL, were signed at the Secretariat in Sri Vijaya Puram in the presence of the Chief Secretary.
The agreement-signing ceremony was attended by Renu Narang, Chief Executive Officer of NTPC Vidyut Vyapar Nigam Limited, Prasun Kumar Mishra, Country Head (Gas Business), Indian Oil Corporation Limited, and senior officials of the Andaman and Nicobar Administration, NTPC, NVVN and IOCL.
The project will establish a 50 MW LNG-based power plant at Hope Town using a Floating Storage and Regasification Unit (FSRU). The Andaman and Nicobar Administration has already allotted 0.82 hectare of land for the project site, while IOCL will develop the LNG receiving, storage and regasification infrastructure required for fuel supply. The project is scheduled for commissioning by August 2028.
The LNG-based power project is among the largest power infrastructure initiatives undertaken in the Andaman and Nicobar Islands and is intended to support the growing electricity demand driven by urban expansion, tourism, commercial activity and future development.
According to the Electricity Department, the project will introduce cleaner and more efficient LNG-based power generation, replacing a significant portion of diesel-based generation. The transition is expected to lower fuel costs, improve operational efficiency, reduce environmental impact, enhance grid stability and strengthen the reliability of electricity supply by providing adequate reserve generation capacity.
The approval of the PPA represents a significant milestone in the implementation process and reflects the Centre’s continued support for strengthening critical infrastructure in the strategically important Union Territory. The execution of the PPA, GSA and LURA marks the completion of major contractual requirements necessary for the project’s progress toward implementation.
The Electricity Department stated that the project represents an important step towards developing a modern, reliable and sustainable power infrastructure for the Andaman and Nicobar Islands. It also acknowledged the support of the Ministry of Home Affairs, Ministry of Power, NTPC, NVVN, IOCL and other stakeholders involved in advancing the project.
