The Hindu Business Line : Shell India in talks for gas sales from Hazira

SHELL India is in talks with Torrent Power Generation Ltd and fertiliser majors Kribhco and RCF Ltd for selling gas to be imported at its upcoming 2.5 million-tonne LNG import terminal at Hazira, in Gujarat, said a senior Shell official.

"We are talking to NTPC, Torrent Power, Kribhco and RCF Ltd for selling gas from Hazira. We are also targeting petrochemicals manufacturers and industrial users and hope to have signed sales agreements by fourth quarter," Mr Marc den Hartog, Director (Gas & Power), Shell India Private Limited, told Business Line.

The company is looking at consumers in need of gas for existing capacities as well as planned expansions. While NTPC will require gas from year 2007, Shell is also looking for buyers interested in buying natural gas once the terminal is operational. The Rs 3,000-crore terminal is scheduled to deliver gas in the fourth quarter of 2004.

French major Total Gaz Electricité Holdings has picked up a 26 per cent stake in Shell Hazira Gas Pvt Ltd, Hazira LNG Pvt Ltd and Hazira Port Pvt Ltd - all three formed for setting up the project.

Shell will compete with public sector Petronet LNG Ltd which is expected to begin sale of gas shipped from Qatar into its 5 million-tonne terminal at Dahej and Reliance Industries' large gas find in the Bay of Bengal, to get a share of power and fertiliser customers running plants on naphtha or at below capacity because of lack of enough supplies.

Petronet LNG has already signed sales agreements for selling part of the 5 million tonnes gas, to be imported during this year, through promoters Gail India, Indian Oil Corporation and BPCL.

Shell India plans to increase the capacity of its Hazira LNG import terminal from 2.5 million tonnes to 10 million tonnes. The company is also expanding capacity of its planned all-weather LNG port at Hazira to handle solid cargo. Shell is looking for partners in the Rs 1,000-crore project.

"We have appointed consultants to advise us on partnerships for the project. The first priority, however, will be the LNG terminal," Mr Hartog said.

According to the concession agreement signed by Shell India with the Gujarat Government, setting up the LNG terminal has to take precedence over other related projects including the port, he said.

Shell has already tied up with Gujarat State Petroleum Corporation for transportation of LNG in Gujarat and may join hands with GAIL (India) Ltd for supplying LNG outside the state.