Hiranandani talks to Hyundai for LNG terminal

Vol 15, PW 13 (12 Jan 12) Midstream & Downstream

Mumbai-based Hiranandani Group is in talks with (South Korea’s) Hyundai Engineering & Construction over a Lumpsum Turnkey Contract to set up Maharashtra’s second LNG terminal after Dabhol.

“We are presently negotiating prices with Hyundai,” Darshan Hiranandani, managing director of group company and project promoter Hindustan Electricity Generation Company, tells PETROWATCH. “Negotiations will most likely last the better part of February.

” Hiranandani, son of Hiranandani Group co-founder Niranjan Hiranandani, adds there is no compulsion to select Hyundai, which submitted a FEED report on the proposed Rs6000cr ($1.2bn) project in October last year. “If we don’t like Huyndai’s final price (for the LSTK) we will go to someone else,” he says.

Last year, Hiranandani asked 15 companies including Huyndai to submit indicative LSTK prices with “plus or minus 30% leeway.” Among those to respond were CTCI of Taiwan, Toyo Engineering, ICB-Technimont and IHI.

Hiranandani expects the chosen contractor to begin construction of the proposed 8m t/y LNG terminal 12 to 14 months from now. Well before that, by June or July this year, a project management consultant will be appointed.

No tender will be issued for this, as the company is already in talks with several consultants. Hiranandani has settled on 8m t/y as the proposed terminal capacity after market studies revealed demand for this quantity in the region.

Proposed to be set up on 22 acres of land at Dighi port, 170-km south of Mumbai, the Hiranandani LNG terminal will serve purely as a merchant facility, open to any LNG importer. “We will charge tolling fees,” says Hiranandani.

“Mine will be a tolling terminal; I am setting up an infrastructure project for anyone who wants to import LNG.” When operational, R-LNG from Dighi can be evacuated to the Dahej to Dabhol pipeline 40-km away.

Around 40% of R-LNG from Dighi is likely to go to a nearby 2500-MW power station proposed by the Hiranandani Group itself.