The Hindu Business Line : Shell raising throughput capacity to meet LNG demand

According to sources, riding on an increasing appetite for energy in the country, The Shell Group has nearly doubled its spot LNG (liquefied natural gas) imports at Hazira during January-June 2008 and has exhausted the existing terminal capacity. The group is currently enhancing the throughput capacity through a de-bottlenecking exercise between 3.5 milliom tonne and 3.7 m.t.

The project is slated to be completed in September paving way for improving the availability of spot LNG in the country. While the cost of the project is not known, sources said the programme includes adding one or two pumps at the terminal and enhancing the re-gassification capacity.

“In the first half of 2008, Hazira has received 19 cargoes to serve market demand. We are indeed currently enhancing throughput to meet demand. Details, however, are commercially sensitive information that we do not comment on,” a Shell spokesperson told Business Line.

According to sources, 19 standard cargoes (of 65,000 tonne each) lead to import of about 1.23 million tonne of LNG in the first six months of 2008.

“In our estimation, they have imported hardly half of the volume during the corresponding period in 2007,” a source in a user company told Business Line.

Shell controls 74 per cent interest in the project through Shell Gas B.V. The remaining is held by Total Gaz Electricité Holdings, France. The $700-terminal commenced operation in April 2005.

According to sources, the terminal has recently enhanced the re-gassification charges from 80 cents to $ 1.1 amillion metric British thermal unit (mmBtu) owing to increase in costs.

This is against 72 cents a mmBtu charged by Petronet LNG, the only other LNG terminal in the country.

Capacity constraint

While the demand for LNG is high, capacity constraint at both the terminals operated by Petronet LNG (at Dahej) and Shell may be adding to the existing availability crisis.

According to industry sources, several business groups such as British Gas, Adani group and Essar have located LNG cargoes for imports in India in the recent past. The imports could not take place due to non-availability of terminal capacity for third-party access.

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