Shell to be offered 26% in FSRU off Kakinada

Vol 17, PW 15 (13 Mar 14) Midstream & Downstream

Shell might have to be satisfied with just 26% instead of 31% in a new Special Purpose Vehicle company planned for a FSRU off Kakinada in Seemandhra, a new state carved out of Andhra Pradesh.

State government sources tell us a committee evaluating how much equity to ‘farm-out’ in the FSRU project of up to 5m t/y capacity will offer 26% to Shell; leaving 45% for the Andhra Pradesh Gas Distribution Corporation, a 50:50 joint venture with GAIL; 26% for Gaz de France; and 3% for Kakinada Sea Ports. “For now we are integrating our feasibility report with the one prepared by Shell for its (abandoned) Kakinada project,” confirms APGDC.

“In another two months (by June) when we finish merging the two reports we’ll call a public hearing and apply for environmental clearance.” Earlier plans for all approvals to be in place by June are on hold ahead of national elections from April 7 to May 12.

Shell realised the absurdity of two parallel FSRU projects at Kakinada last November and quietly abandoned ‘go-it-alone’ plans opting instead to begin talks for up to 31% in the APGDC-driven initiative. Whether these talks or APGDC plans for a FSRU will ever materialise is now open to serious question following Andhra Pradesh’s formal separation into Telangana and Seemandhra states on June 2 this year.