Cancellation looms for several LNG projects

Vol 5, PW 8 (06 Jun 01) Midstream & Downstream

Moves are afoot to suspend or even terminate several approvals for the construction of LNG terminals across India that were issued by the Foreign Investment Promotion Board.

A source in the commerce ministry confirms that ministers arecontemplating action following a complaint from the oil ministry of little or no progress at a number of sites where approval has been granted over the last four years (see table below). Several rounds of discussions have already been held in Delhibetween officials from the two ministries to decide a course of action.

In private commerce ministry officials admit that FIPB approvals for proposed LNG terminals were issued too quickly in the heyday of the LNG frenzy in India, beginning in 1997. At that time the government anticipated quick progress on execution of LNG projects and issued licenses at random.

"The government's wait and watch policy is out," one senior official tells Petrowatch. "Stern action is in store for non serious players.

If they don't respond to one or two warnings in writing their FIPB approval will be terminated." Company Foreign collaborator Location Capacity Gas supply F.I.

P.B Clearance 1) Enron International Enron International Dabhol (Maharashtra) 2.5m t/y expand to 5 & 10m t/y Captive power plant and others in Maharashtra and elsewhere Yes 2) British Gas British Gas Pipavav (Gujarat0 2.5m t/y expand to 5m t/y Gujarat Yes 3) Ispat Group of Industries Ispat Energy Kakinada (Andhra Pradesh) Initial 2.5m t/y.

Expansion unspecified. Andhra Pradesh Yes 4) Reliance Industries GDR/ADR Private Placement Jamnagar and Hazira 5m t/y at each terminal Gujarat and other states Yes 5) Royal Dutch Shell Group of Companies Shell Hazira (Gujarat) 2.7m t/y.

Expansion unspecified. Essar Power and Essar Steel Yes 6) Petronet-LNG Gaz de France Dahej (Gujarat) 5m t/y Gujarat Yes 7) Petronet-LNG Gaz de France Cochin (Kerala) 2.5m t/y Kerala Note applicable 8) BHP Petroleum BHP Petroleum General proposal Not specified Not specified Yes 9) Hardy Oil/Nagarjuna Holdings Hardy Oil and BHP Petroleum Kakinada (Andhra Pradesh) 1m t/y expand up to 5m t/y Andhra Pradesh Yes 10) Tractebel Tractebel General proposal Not specified Not specified Yes 11) Dakshin Bharat Energy Consortium Unocal, Woodside, Siemens, CMS Energy Ennore (Tamil Nadu) 2.5m t/y Captive power plant at Ennore and to others in Tamil Nadu Yes 12) GAIL/Tata/Total TotalFinaElf Trombay (Maharashtra) 3m t/y expand up to 6m t/y Maharashtra and other states Yes 13) Consortium of fertiliser companies N/A Kishoriprasad 3m t/y expand to 6m t/y Orissa, West Bengal, Bihar, Uttar Pradesh, Punjab Note applicable 14) Al Manhal Al Manhal (U.

A.E) Gopalpur (Orissa) 3m t/y Orissa and Andhra Pradesh No (Source: Ministry of Commerce)