Nitin Shukla of Shell plays reporter to Pandian of GSPC

Vol 10, PW 7 (27 Jul 06) People & Policy

Rarely do you see the top executive of one energy company in the role of reporter and interviewer of the MD of another energy company.

But Nitin Shukla, head of Shell Hazira LNG, did just that recently with DJ Pandian, managing director of Gujarat State Petroleum. PETROWATCH has a video recording of the 15-minute interview held recently in Pandians wood-panelled 3rd floor office at GSPC Bhawan in Gandhinagar.

The purpose of the interview is unclear. Could it be for Shells in-house magazine Shukla begins by thanking Pandian profusely for sparing time on a Sunday afternoon to share his perspectives on the Indian energy sector.

Responds Pandian: It is always a pleasure to meet you, talk to you, whether it is a Sunday or a Monday or a Tuesday. Its always a pleasure to talk to Shell officials.

We have a wonderful relationship. Pandian then briefly introduces himself and GSPC, the company hes been heading for four years.

Then, Shukla asks a penetrating question. What keeps you awake at night Pandian replies that the 100,000-MW power shortage in India gives him sleepless nights.

My challenge as a nodal agency is to buy gas for Gujarat and India. This job is keeping me awake night and day.

More seriously, Pandian stresses that the state government has taken a conscious decision to develop a gas-based economy. Unlike the rest of India, says Pandian, Gujarat adapted to the market price mechanism some time back.

Gujarats (gas) market is mature; the Indian market is not. Shukla asks about important aspects of LNG contract terms for GSPC and India.

Answers Pandian: The market has understood (LNG contract) terms and conditions. Long-term players are aware of take-or-pay.

They are adjusting to market prices, moving away from APM (regulated) prices. But stresses Pandian: Right now the concern is non-availability of supplies.

Pandian said Gujarat customers are willing to pay market prices. But this does not mean open-ended prices, he adds.

Customers want to close (gas purchase) deals but there cannot be a daily (price) fluctuation. There should be a floor and cap.

Prices should be fixed for some time, say three to five years. Then only can they set their own end (product) prices.