Shell offers GSPC capacity at Hazira terminal

Vol 13, PW 26 (17 Jun 10) Midstream & Downstream
     

Shell is offering part of its Hazira LNG terminal capacity to GSPC in a move that signals the first step towards transforming the Shell and Total operated terminal into one that receives ‘term’ supplies.

On offer from Shell is the exclusive right to use 1m t/y of the Hazira terminal’s overall 3.62m t/y capacity. “Shell made this offer in April,” reports an industry source.

GSPC is presently importing monthly ‘term’ LNG cargoes from Stream - a joint venture between Spanish companies Repsol and Gas Natural - to the busy Petronet-LNG terminal at Dahej with a capacity of 10m t/y. But now Shell wants GSPC to bring some of these ‘term’ cargoes to Hazira instead.

Yet its offer is not without conditions. If GSPC accepts and brings in some ‘term’ LNG to Hazira, then it must also buy an equal amount of LNG from Shell.

If, for example, GSPC were to bring in a 50,000-tonne short-term LNG cargo to Hazira in June, then it would also need to simultaneously source an additional 50,000 tonnes of LNG from Shell. Still unclear is whether Shell will supply this additional LNG to GSPC from its own spot LNG cargoes or arrange long-term supplies from a LNG producer like Qatar.

Also unclear is whether Shell is offering GSPC a discount on its standard regasification rates for LNG cargoes brought to Hazira, which are between $0.90/mmbtu and $1/mmbtu. Whatever the intricacies, observers say Shell’s offer to GSPC indicates a new direction for the Hazira terminal.

Since it was commissioned by Shell in 2005, the terminal has received spot cargoes only. Shell first announced plans to move towards ‘term’ supplies for Hazira in September last year.

So far this year Shell has brought in three spot cargoes to Hazira, the most recent on June 3.

LNG Summit