HPCL wants Mundra for Gujaratآ’s third LNG terminal

Vol 10, PW 13 (19 Oct 06) Midstream & Downstream

If Hindustan Petroleum gets its way, Mundra will most likely be the site of Gujarats third LNG terminal after Dahej and Hazira, PETROWATCH learns HPCL has persuaded Gujarat State Petroleum that the two companies should jointly set up a new 5m t/y terminal at Mundra, owned by the Adani Group, instead of Pipavav, which was GSPCs original choice, and once the site of a proposed LNG terminal planned by British Gas.

HPCL and GSPC were earlier undecided about whether to set up their joint LNG facility at Mundra or Pipavav. GSPC appeared to favour Pipavav and had even asked HPCL to commission a DFR (Detailed Feasibility Report) on the port.

But during their last meeting, HPCL convinced GSPC to agree in principle to Mundra. Now there is no question of carrying out a DFR on Pipavav, we hear.

On 13th October, HPCL and GSPC were scheduled to discuss a draft MoU for the proposed terminal at Mundra but the meeting was called off because GSPC managing director DJ Pandian had a speaking commitment in Delhi. Pandian was busy, we hear.

Well try to meet again this week. HPCL and GSPC are at an early stage in talks with little clarity on the equity breakdown proposed for the terminal.

On 13th October, however, Pandian told reporters in Delhi that GSPC would take 26% in the venture and that the new LNG terminal (he did not identify the location) would be completed and commissioned by 2010-2011. HPCL is the countrys second largest state-owned refiner after Indian Oil and has always preferred Mundra as the site of any proposed LNG terminal because of its established relationship with Mundra port, where it stores much of its imported crude oil.

"When the LNG terminal is set up we want to take the gas to north India, adds a source. This has always been our plan.

Since the beginning we have known about the demand potential in the north. HPCL isplanning a separate oil product pipeline from Mundra to Delhi.