News: Shell readies $250-mn Hazira expansion plan

(BS 25/03/2006) Mumbai - The LNG consortium is expanding its capacity to 5 MT from the current 2.5 MT.

Shell India has drawn up plans to expand Hazira terminal and port with an investment of over $250 million (over Rs 1,100 crore).

Ahead of the proposed expansion, the company is likely to sell part of its stake to some of the majors in the sector. Shell holds 74 per cent stake while French oil major Total SA holds the remaining stake in the terminal.

Marc den Hartog, director, Shell India, confirmed that talks were on with both Indian and foreign companies for the expansion project. However, he declined to divulge the details of the stake sale plan.

Marc told Business Standard, “Two consortiums are controlling the Hazira Shell project. In that, Hazira port consortium has the potential to grow. Now the port is handling only LNG cargoes. We are planning to expand it to a container cargo handling terminal of world scale with an investment of $250 million. Now the depth of the port is 12 metre and it should be deepened to 60 metre to handle container ships. The entire expansion is likely to be over in three years.”

Port consortium is planning to build a new container terminal also. The LNG terminal consortium is expanding its capacity to 5 million tonne (MT) from the current 2.5 MT. French oil major Total SA is a partner in these consortiums.

Marc clarified that Shell did not have any plans to go for a public float.

“Major companies in the sector are ready to collaborate with us and there is no need to go to the public,” he pointed out.

He also denied that Hazira terminal was facing shortage of natural gas for imports. “We are sourcing gas from Oman, Australia, Malaysia, Brunei, Qatar and Egypt. These are all short term contracts. If any problem suddenly occurs in one of these countries, we will source gas from the other,” he said.

National Thermal Power Corporation and Maharashtra State Electricity Board are likely to enter into an agreement with Shell for LNG supplies. Marc said that talks are going on and a decision is expected soon.

The company is in talks with Torrent Power Generation Ltd and fertiliser majors Kribhco and Rashtreeya Chemicals and Fertilisers for selling gas.