Royal Dutch Shell Group .com (India): Shell-Total begins Hazira LNG terminal: The company sold the first gas from the terminal to Gujarat State Petroleum Corporation (GSPC) today, Marc den Hartog, Shell India Director (Gas and Power), said. ( 22 April 05


Friday, 22 April, 2005


New Delhi: Royal Dutch/Shell Group and Total Gaz Electricite Holdings France, two of the private liquefied natural gas (LNG) providers in the world, on Thursday formally announced the inauguration of the Hazira LNG Terminal and Port at Hazira in Gujarat with the unloading of the first cargo of LNG from the ship Gemmata.  


The terminal has been set up with an investment of over Rs 3,000 crore.


The company sold the first gas from the terminal to Gujarat State Petroleum Corporation (GSPC) today, Marc den Hartog, Shell India Director (Gas and Power), said.


Shell Gas B.V holds 74 per cent of equity in the Hazira companies, while Total Gaz holds 26 per cent.


Elaborating on the LNG sourcing model being followed at the terminal, Hartog said that the Hazira terminal does not follow the conventional model of sourcing. Instead of sourcing from a particular project on long-term and then tying up long-term sales contract with customers in the importing countries, it offers flexible customer tailored contracts. "We aim to match customer's requirements of price and quantity with terms available in global gas market," he said.


The first gas was sourced from Australia's North West Shelf project, in which Shell has a 22 per cent stake.


The cargo has been sold to GSPC. A Shell-controlled tanker, Gemmata, carried the first cargo. The shipping of LNG was in conformity with the new LNG shipping laws, Hartog said.


Vikram Singh Mehta, Chairman, Shell Group of companies in India, he said, ``the current policy does not allow import of LNG on free-on-board (f.o.b.) basis. We have imported the cargo on ex-ship basis. It is in conformity with the guidelines."


Further, the company was also open to various joint ventures for its container and port projects.


The LNG terminal's initial throughput capacity is of 2.5 million tonnes per annum (mtpa), which the company proposes to raise to 5 mtpa. The site has been laid out for increasing capacity up to 10 mtpa with two additional tanks.


LNG for Hazira may be sourced from Shell-partnered plants in Oman, Australia, Brunei and Malaysia or Total's LNG production in Indonesia, Qatar, Oman and Abu Dhabi. On the issue of price at which Shell sold the gas to GSPC, the company remained non-committal. However, indications are that it has sold at a price few cents more than Petronet's sale price of $ 3.66 per million British thermal unit (mBtu).


The company has not tied up with any other customer other than GSPC and was open to giving equity to a company that brought value to the business.


The LNG terminal and port was dedicated to the nation this afternoon by the Union Minister for Petroleum and Natural Gas, Mani Shankar Aiyar, and the Gujarat Chief Minister, Narendra Modi, at simultaneous ceremonies at New Delhi, Gandhinagar and Hazira.


Ahmedabad Bureau reports: Narendra Modi, repeated his demand that the State should not be denied its own gas grid.


In the absence of a Central legislation, Gujarat has already laid some 1,400 km of gas grid and plans to have a 2,200 km network.


The State had even formulated a State Gas law, that was struck down by the Supreme Court as petroleum and natural gas are central subjects.


Gujarat has been demanding that the monopoly of GAIL (India) should be done away with and its gas grid should be recognised by the Centre as and when it comes up with laws on the gas natural sector.


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