Shell in talks with Essar to set up terminal in Hazira

Company to invest Rs 3,000 cr in cargo and container project

Royal Dutch Shell today said it was in discussion with Essar Steel to set up a bulk terminal in Hazira for captive use. Shell plans to invest Rs 3,000 crore in bulk cargo and container terminal at Hazira port, where it has built a regasification terminal.

For the container terminal, Shell is talking to several multinational firms, including Maersk, P&O Ports of Australia, Port of Singapore Authority (PSA) and Dubai Port International.

While Essar has been offered 50 per cent stake in the $100 million bulk cargo terminal, Shell is looking at 49 per cent equity partnership in the container terminal.

Shell has formed Hazira Port Pvt Ltd for building the terminals. "The ultimate investment (in the two terminals) will be Rs 3,000 crore," Shell India Director Marc den Hartog said.

He said Shell began commercial supplies of natural gas from its LNG terminal at Hazira from Saturday to its first customer, Gujarat State Petroleum Corporation.

Shell will sell 0.7 million standard cubic metres per day of gas to GSPC for 210 days, at a price of $3.70 per million British thermal unit (mbtu).

Shell's price is slightly higher than Petronet LNG Ltd's sale price of $3.66 per mbtu.

Hartog said the first LNG consignment was sourced from Australia's North-West Shelf project, in which Shell has a 22 per cent stake.

Shell is promoting the Hazira LNG terminal as a merchant terminal. The company was not following the conventional model of sourcing LNG from a particular project on long-term basis and then tying up long-term sales contracts with customers in India.

A Shell-controlled tanker, the 136,000 cubic metre Gemmata, carried the first cargo.

For future supplies, the company would be going in for flexible natural gas supply contracts for its 5 million tonne (mt) terminal at Hazira in Gujarat.

The agenda

Shell plans to invest Rs 3,000 cr in bulk cargo and container terminal at Hazira

For container terminal, Shell is talking to MNCs like Maersk and P&O Ports

Essar offered 50% stake in the $100 million bulk cargo terminal

Shell starts commercial supplies of natural gas from its Hazira terminal