Shell and Marubeni join east coast LNG scramble

Vol 15, PW 2 (28 Jul 11) People & Policy

Shell and Marubeni are the latest to join the mad scramble of companies exploring the possibility of setting up LNG terminals on India’s east coast, driven by the cruel awakening that Reliance’s depleting D6 gasfield might not be all it was cracked up to be.

Shell’s interest in owning a third LNG terminal after Hazira in Gujarat and Altamira in Mexico is the stuff of rumour in Gujarat’s energy department, while pregnant hints from sources close to the Anglo-Dutch major suggest something is indeed brewing. “Nothing has been decided yet,” alludes a source, sweating with fear of corporate retribution.

“This is just a possibility; we are yet to take a final call.” Andhra Pradesh, it seems, would be Shell’s favoured location, beating Tamil Nadu, favoured by IndianOil, or infrastructure-starved Orissa.

Nitin Shukla, Shell Hazira CEO, unsurprisingly, declined to return repeated calls pleading for confirmation. Marubeni’s interest is more baffling.

Until now Japan’s fifth largest trading company has restricted itself to selling LNG cargoes into India, mainly to GAIL and Reliance. That could soon change, as Marubeni contemplates an almighty plunge into the weird and wonderful world of Indian infrastructure projects.

Would this be alone or in a consortium It’s too early to say. Beyond doubt is that on (Tuesday) July 19 a nine-member strong Marubeni delegation, including a board director, held a closed-door, post-lunch 30-minute private meeting with oil secretary Girish Chaturvedi that focused solely on LNG, not just importing the stuff, but also the nuts and bolts of setting up a terminal to receive and regasify it – on the east coast.

“Marubeni came to understand the Indian LNG market and government policy on setting up an import and regasification plant,” confirms a well-placed source. “In addition to LNG trading they are keen to set up a LNG terminal in India.