Pandian meets Adani and Prashant Ruia for LNG talks

Vol 11, PW 21 (06 Mar 08) Midstream & Downstream

Gujarat’s rugged coastline is home to two LNG terminals already.

Adding another two would be unprecedented, and in the eyes of many, a clear case of overkill. Luckily for those with a sense of proportion, GSPC managing director DJ Pandian appears to agree.

How else to explain a meeting on February 19 in Gandhinagar with Essar boss Prashant Ruia and Gujarat-based industrialist Gautam Adani Also present was Rakesh Jain of Suntera, with whom GSPC has an agreement to source LNG. During the meeting, a source reports that Pandian argued for the four companies to join hands to build one additional LNG terminal in Gujarat, not two, as originally planned.

On January 12 last year, during the Vibrant Gujarat trade fair, Essar and the Adani Group signed separate MoUs with GSPC to set up two new LNG terminals. Essar identified Pipavav as its preferred destination; Adani chose Mundra.

“GSPC believes it would get stretched looking after two LNG projects simultaneously,â€‌ we hear. “Especially when its hands are full with exploration in the KG Basin and the (proposed) 700-MW power project at Pipavav.

â€‌ During the meeting GSPC officials stressed that a LNG terminal at Pipavav – chosen but later aborted by BG as the site of its LNG terminal – makes no sense because port operator Maersk Group of Denmark wants it as a container terminal. “Pipavav also has a very narrow navigation channel,â€‌ adds a source.

“This could prevent two ships berthing at the same time.â€‌ More, land originally meant for BG’s LNG terminal is being used as a LPG import facility.

No such problems, it seems, afflict Mundra, which GSPC prefers. Not only is the port owned by Gautam Adani’s company, it also houses a tax-friendly Special Economic Zone in which the LNG facility is proposed to be built.

Adani, it seems, told the meeting his group had already carried out technical studies and identified a location for the terminal within the SEZ.