India's Kandla E-Methanol Plant Targets $750/mt Cost

Kandla Project Targets Low-Cost E-Methanol

India’s first port-based e-methanol production facility, being developed at Deendayal Port in Gujarat, is targeting a production cost of about $750 per metric tonne, according to a report by Ship & Bunker. That figure compares with a global e-methanol rate of roughly $1,300/mt, according to a government press release cited in the report.

The plant, with a planned capacity of 150 mt per day, is a joint undertaking between Deendayal Port Authority (DPA) and Assam Petro-Chemicals Ltd (APCL). DPA will hold a 76% stake in the project, with APCL holding the remaining 24%. The foundation stone for the facility was laid last week, as Ship & Bunker had previously reported.

Renewable Inputs and Phased Build-Out

According to the Ministry of Ports, Shipping and Waterways, the facility will rely on renewable power, water, and biogenic CO2 as feedstocks to produce e-methanol intended for supply to methanol-fuelled vessels operating on the Asia-Europe trade corridor.

The project is being built in two phases. Phase I will add 50 mt/day of capacity and is targeted for completion by January 2027, while Phase II will contribute a further 100 mt/day and is scheduled for March 2027.

Port Authority’s Role and Wider Supply Chain

DPA is set to provide 75 acres of land along with desalinated water and renewable energy to support the plant’s operations. Beyond production, the facility is expected to anchor a broader green-fuel supply chain at Kandla, encompassing storage, transportation, and marine fuel supply infrastructure for methanol bunkering.

If the targeted production cost is achieved, the Kandla plant could offer a materially cheaper domestic source of e-methanol compared with prevailing global prices, potentially supporting uptake among shipowners operating methanol-fuelled tonnage on Asia-Europe routes.