The Hindu : Shell's Hazira terminal taking shape

Online edition of India's National Newspaper
Saturday, Sep 20, 2003

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Shell's Hazira terminal taking shape

HAZIRA SEPT. 19. The world's third largest oil firm Royal/Dutch Shell today said its $600 million liquefied natural gas import and regasification terminal here will be commissioned in the second half of 2004 and hoped to make available gas at competitive price by the year end.

"We can make gas available to customers at a competitive price than alternative form of fuels,'' the Royal/Dutch Shell Group Managing Director, Malcolm Brinded, told a news conference here.

The company is investing $600 million in setting up LNG import, regasification and storage facilities at this port city. Two tanks of 1.60 lakh cubic metres capacity will receive natural gas, liquefied at minus (-) 160 degree Celcius and transported in 1.35 lakh cubic metre capacity tankers, from Oman, Malaysia, Australia and Russia, where Shell has equity stakes in gas producing fields.

"This is a major investment (of Shell) in India. The $600 million investment shows Shell's confidence in future of India, its economic growth prospect, development of gas market and the Indian Government,'' Mr. Brinded said adding India and China would be power houses of growth for the world.

The terminal will initially have a capacity of 2.5 million tonnes of LNG (around 9 million standard cubic metres a day), which will be doubled once demand picks up.

Mr. Brinded said the company aimed at selling regasified LNG in Gujarat, Maharashtra and other neighbouring States.

India was now deficit in natural gas as domestic production of 65 mscmd is way short of demand of 115 mscmd, he said, adding, this had forced power, fertilizer and host of other industrial units such as glass to use expensive naphtha as feedstock. "We are confident of getting customers for our gas. We definitely cannot compete with subsidised domestic natural gas which is priced close to $2 per million BTU (British Thermal Unit) but will certainly be cheaper than naphtha (priced at over $6 per million BTU),'' he said.

On Shell's radar are power and fertilizer units using naphtha current as feedstock, he said but did not give the price at which the company would offer the imported gas.

Shell has also bid for supplying LNG to power projects of state-run National Thermal Power Corporation (NTPC), which is seeking gas at $3 per million BTU.

Shell will compete with public sector Petronet LNG Ltd. which is expected to commence sale of gas shipped from Qatar from January 2004, and Reliance Industries' gigantic gas find in the Bay of Bengal, to get a share of power and fertilizer customers running plants on naphtha or at below capacity because of lack of enough supplies. "We feel there is enough demand to absorb gas from all (three). Indian economy is growing and so is gas consumption,'' said Marc den Hartog, Director (Gas and Power), Shell India Pvt. Ltd.

Construction on the Hazira terminal began in February 2002 and the project is about 60 per cent complete. — PTI

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