The Hindu Business Line : Shell Hazira terminal delayed till March

ROYAL Dutch/Shell's 2.5 million tonne liquefied natural gas import terminal at Hazira is set to miss its commissioning deadline of December. The Rs 3,000-crore project, being executed by Shell subsidiary Hazira LNG Pvt Ltd, has been delayed till March 2005.

"The terminal will become operational only by February-end or March next year. The delay was caused by contractors appointed to construct the import terminal," a senior company official said.

The two contractors - French company Hazira Cryogenic Engineering and Hazira Marine Engineering - will have to pay a penalty for the delay according to their contract with Shell, the official said. He did not specify the amount of the penalty.

Royal Dutch/Shell may source liquefied natural gas from Oman, Qatar, Malaysia or Nigeria for sale in India from the first quarter of 2005.

"Expansion is under way at Royal Dutch/Shell's Malaysia, Nigeria and Oman natural gas liquefaction units. We do not know yet where the LNG will come from," he said.

Shell also plans to increase capacity of the LNG import terminal to receive 10 million tonnes a year. The company has so far maintained that it would double its capacity to 5 million tonne. Shell has provided space for adding two more LNG storage tanks of 2.5 million tonne each at the Hazira terminal.

Two ships worth $400 million needed for importing the LNG may be brought in from West Asia, he said. According to the project plan, Shell's subsidiary Hazira Port Private Ltd will set up the private multi-cargo port at a cost of $200 million. Work on this has been completed.

The import terminal and the 17-km `send out pipe' (the pipeline that connects it to the Gujarat State Petronet Ltd's gas grid) were to be completed by December this year, at a cost of $320 million.

The ship carrying imported LNG is scheduled to unload its first consignment in the first quarter of 2005 and deliveries to be regularised by June 2005.

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