Shell LNG terminal to be commissioned on Thursday

In a related development, another Shell arm Hazira Port Pvt Ltd, the company responsible for developing a container terminal and bulk cargo port at Hazira, has roped in Essar Steel Ltd as a strategic partner.

Marc den Hartog, director of Shell Gas and Power, who is also overseeing the projects in Hazira, told Business Standard, "The ship from Singapore, which has loaded LNG from Australia, has arrived in Hazira. We are all set to commission the LNG terminal, with a 2.5 MTPA capacity, this Thursday.

"Gujarat State Petroleum Corporation Ltd (GSPCL) has entered into a gas purchase agreement with us and we also expect companies under the Essar Group to buy LNG from us, though no formal agreement has been signed yet," he explained.

"Shell has already invested Rs 3,000 crore for the terminal and the LNG jetty. We are going to invest at least another Rs 1,000 crore for the bulk cargo port and container terminal, being developed close to the LNG terminal site," he added.

Shell, which had signed a concession agreement with Gujarat Maritime Board (GMB) in 1999 for developing the multi-cargo port and container terminal at Hazira, had locked horns with Essar Steel after the latter filed a case accusing Hazira Port Pvt Ltd of 'breach of trust'.

Essar blamed that Hazira Port was attempting to keeping Essar away from taking an equity stake in the Port. Essar Group has a power plant a steel plant in Hazira.

But before GMB could intervene and sort out the issues between Essar and Shell, Total Gas and Power picked up 24 per cent stake in Hazira Port. Total also picked up a 24 per cent stake in Hazira LNG.

"The issues have been sorted out through negotiations and Shell will go ahead with the bulk cargo port along with Essar as a partner," said Hartog.

"We also are looking for strategic partners for the container terminal, which is not an expertise of Shell or any of its group companies. If we do not find a suitable partner, we may finally go alone. A final decision on the container terminal and the bulk cargo port would be taken by end of this year," he added.

Asked about the tussle between Essar and Shell, H K Das, chief executive officer of GMB, said, "The matter was referred to us by Essar seeking our intervention. Now we understand that issues between the two parties have been sorted out and Shell would go with Essar as a partner for the port."