Shell hopes to sign Gujarat GTA by 15th August

Vol 6, PW 5 (08 May 02) Midstream & Downstream

ITS BEEN A while since we had anything positive to report about Shell's LNG project at Hazira.

Happily, we can now report several developments that stress the Anglo-Dutch giants determination to put Hazira firmly back on the LNG map of India. We learn for example that Shell has marked 15th August this year to sign a Gas Transmission Agreement with Gujarat State Petronet to transport its LNG from Hazira to customers.

Anyone doing business in India knows that 15th August is a key date in the national calendar. For Shell it will hopefully put to rest doubts about its commitment to the Hazira LNG project.

Shell tells us the agreement with Gujarat Petronet follows the signing of a Heads of Agreement between the two companies on 23rd April. "There is a lot of work to be done," reveals a source.

"But we are working towards completing it before 15th August." Both sides are still negotiating key issues: how long will be the tenure of the agreement Will Shell use all of the gas grid network or only a portion On 22nd April, just a day before it signed a HOA for the GTA, Shell also signed a 35-year BOOT (Build Own Operate and Transfer) concession agreement with Gujarat Maritime Board for the 11.5m t/y Hazira port to include a 5m t/y LNG import terminal and a solid cargo port. According to Shell, the concession agreement is a "big enabling factor" in the company's Hazira LNG plans.

"This was one thing that was holding up a lot of our plans for the LNG terminal," we learn. "We are now busy with site preparation and basic construction work will begin after that."