A planned e-methanol plant at Kandla Port in the Indian state of Gujarat is aimed at supplying the marine fuel to the shipping sector.

Assam Petro-Chemicals Ltd has signed an MoU with Deendayal Port Authority to develop a 150 mt/day e-methanol plant at Kandla Port, India’s shipping ministry said in a press release on Thursday.

The project, which will involve capital investment of more than INR 12 billion ($133 million), is intended to create an integrated production and bunkering value chain within the port.

Under the agreement, the port authority will provide pipeline connectivity, storage and fuel-handling infrastructure, while APL will establish the e-methanol production facility inside the port area.

E-methanol is produced using green hydrogen and captured carbon dioxide powered by renewable electricity and is increasingly viewed as a viable alternative fuel for shipping.

The partners have not specified when the plant will become operational, but said it will support Kandla’s development as a bunkering hub for low-carbon marine fuels.

“As a marine fuel, e-methanol meets international emissions regulations & enables cleaner long-distance shipping,” Sarbananda Sonowal, India’s Union Minister of Ports, Shipping & Waterways, said.