The Hindu Business Line : HPCL keen on stake in Shell's Hazira terminal

HINDUSTAN Petroleum Corporation Ltd is to begin talks with Shell India soon for buying a stake in its 2.5 million-tonne LNG terminal at Hazira, Gujarat.

HPCL is interested in marketing LNG, to be imported by Shell later this year, to its naphtha customers on the west coast, Mr M.B. Lal, Chairman and Managing Director, said here today.

He told presspersons, on the sidelines of a CII seminar on globalisation. "We have the option of marketing Shell's imported LNG. It is not necessary that we pick up a stake (in the project) to sell the gas. However, we would be negotiating for buying a stake. Talks between the two companies will begin soon," he said.

HPCL supplies naphtha to power and fertiliser customers on the west coast. Once Petronet LNG and Shell's Hazira project come on line, many of these customers are expected to substitute naphtha with gas.

Unlike the company's downstream competitors Indian Oil and Bharat Petroleum, HPCL will be a late entrant in marketing natural gas. The company was among the first to initiate entry in the gas business, in the late nineties, when it proposed to set up an LNG terminal along with French energy company Total. The project, however, did not get off the ground.

Meanwhile, HPCL is also considering opportunities to buy stake in exploration properties abroad through its subsidiary Prize Petroleum.

"We have a good deal of experience in exploration through our subsidiary Prize Petroleum. Also, we have recently recruited experienced people for meeting Prize's goals," Mr Lal said. The company would look at properties that did not need Prize Petroleum to take exploratory risks but had not yet begun production.

Prize Petroleum, a joint venture between HPCL (50 per cent) and financial institutions HDFC and ICICI, made its maiden foray into the upstream business recently after it won bids for three ONGC marginal fields Prize had bid for the fields with IHS Energy and drilling company Aban Loyd Chiles Offshore.

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