But there's no stopping the speculation

Vol 4, PW 10 (21 Jun 00) Midstream & Downstream
     

Gujarat Pipavav's robust denial will do little to stem a rising tide of market speculation.

Much of this has to do with unsubstantiated gossip - circulating in the UK business press and originating in the City of London - that Shell is about to embark on a global takeover of British Gas. As with speculation of any kind, it is impossible to confirm such reports.

"If it is happening it is happening on a Chairman to Chairman level and I wouldn't even know about it," reveals one source at British Gas. Suffice it to say that if Shell acquires British Gas it is difficult to see how the company will allow for imports of LNG at Pipavav, when it is planning a rival 10m t/y terminal at Hazira.

That at least is the view of one prominent Shell figure in India. Other revealing signs come from discussions with EPC contractors who report that preliminary work on an LNG facility at Pipavav is on hold.

Gujarat Pipavav originally expected the terminal to be completed by July this year. The deadline for completion has now reportedly been put back to March 2001.

Yet another sign is a report of several British Gas staff that previously worked on Pipavav moving over to work for Shell on its Hazira project. But perhaps the most revealing signal comes from the top of Gujarat Pipavav LNG itself.

A source reveals that Nikhil Gandhi, Chairman, of Seaking Infrastructure, and major shareholder in Gujarat Pipavav, is himself convinced of the inevitability of Shell's ascendancy in the race between Hazira and Pipavav. If that holds true, there is clearly more at stake than the (unresolved) Shareholder Agreement between British Gas and Gandhi's company Seaking Infrastructure.

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