Adani plans talks with Shell to use Hazira LNG terminal

Vol 10, PW 19 (25 Jan 07) Midstream & Downstream

Importing LNG to India may no longer be a game for the Big Boys, if Gujarat Adani Energy has its way.

Next month Adani hopes to begin talks with Shell for the use of its Hazira LNG terminal to import medium-term cargoes for fertiliser and power customers. Adani wants to book slots at Hazira to bring in one cargo of 80m cubic metres LNG every month for a year.

Of immediate interest to Adani is fertiliser company KRIBHCO’s requirement of gas for a whole year. Late last year KRIBHCO issued a tender for 1.5m cm/d gas from 1st January to 31st December 2007 and received bids from Gujarat Gas, GSPC and Adani by the 22nd December 2006 deadline.

Shell did not bid. Gujarat Gas offered 300,000 cm/d at $7.40 per mmbtu and GSPC offered 100,000 cm/d at $9.10 per mmbtu – both till March 2007.

Adani offered the entire KRIBHCO requirement of 1.5m c/d at $8.95 per mmbtu, but from 1st April 2007 to 31st March 2008. Industry sources believe KRIBHCO will be tempted to award the full year contract to Adani even though the period of its offer does not exactly match the tender.

“Adani is the only company offering supply for a full year,â€‌ we hear. “KRIBHCO needs gas even after 31st December 2007.

â€‌ Adani earlier wanted to use Petronet-LNG’s storage and regassification facilities at Dahej to service KRIBHCO but that now seems unlikely. “Petronet-LNG is being difficult,â€‌ says an Adani source.

“They’re not saying yes or no. When we ask for slots they say they plan to bring in a cargo on those dates.

â€‌ Petronet-LNG is seen as blocking others from using its terminal hence Adani’s approach to Shell. “Shell did not bid for the KRIBHCO tender,â€‌ we hear, “so there’s no conflict of interest.

â€‌ If Shell agrees and Adani wins the gas supply contract, Adani could meet KRIBHCO’s requirement with eight cargoes. Anything surplus, it believes, could be sold to other potential customers such as IFFCO or NTPC.

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