GSPC dumps Petronet-LNG for Shell

Vol 14, PW 3 (29 Jul 10) Midstream & Downstream

Overcapacity at Petronet-LNG’s Dahej terminal has just cost it one of its biggest customers – frustrated GSPC has switched to using Shell’s Hazira terminal for its short-term LNG cargoes.

PETROWATCH learns GSPC was supposed to have brought in a short-term cargo from Stream (a 50:50 JV between Spanish companies Repsol and Gas Natural) to the Dahej terminal in June. We now hear that it was forced to abort these plans at the very last minute and the ship turned back on the high seas.

These rumours cannot be confirmed but on the morning of July 26 (Monday) GSPC landed a 53,000-tonne Stream cargo brought aboard LNG carrier Iberica Knutsen at Hazira, and announced it was switching loyalties from Petronet-LNG to Shell. “The (Stream) cargo should have come into Dahej in the last week of June,” confirms a GSPC source, when contacted.

“But GSPC was not allotted any window. All four Dahej LNG storage tanks are full to the brim.

” R-LNG has been accumulating for some time in the 10m t/y Dahej terminal’s storage tanks. “This is because many of Petronet-LNG’s downstream customers have switched over to D6 gas,” explains an observer.

He adds that Petronet-LNG promoters Bharat Petroleum, GAIL and IndianOil are finding it especially hard to sell R-LNG to fertiliser and power companies, as these companies are allocated D6 gas on a priority basis “The situation is bad,” we hear. “BPCL and IOC cannot sell even half of their 20m cm/d share (of Dahej R-LNG).

” But bad news for Petronet-LNG is good news for Shell, which has welcomed the GSPC move with open arms. Hazira had been experiencing a downturn, leading Shell to shut the terminal for 33 days between January and March this year.

In April, Shell offered 1m t/y of the terminal’s 3.6m t/y capacity to GSPC, which now plans to bring in another six short-term cargoes from Stream to Hazira.