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Gulf-Times (Qatar): Shell may up LNG imports at $600mn Indian plant

Published: Wednesday, 28 February, 2007, 10:13 AM Doha Time
SINGAPORE: Royal Dutch Shell, the world’s biggest non-state liquefied natural gas producer, may double imports through a $600mn LNG terminal in India this year, after customers agreed to pay international prices for the fuel.

Shell and partner Total aim to import about 24 cargoes this year, equivalent to about 56% of the terminal’s capacity, Marc den Hartog, director of gas and power at Shell India Ltd, said by phone from New Delhi on Monday.

Indian power producers and manufacturers are turning to imported gas, paying as much as five times more, because declining output from aging fields failed to keep pace with demand growth.

The turnaround at Shell’s West Coast terminal underscores increased confidence in India’s gas market.

“There were genuine concerns in 2005 among customers that spot LNG was expensive and that it would set a precedent for other gas prices,” said Hartog, 46. “It took time to convince customers.”

Shell has never operated its 2.5mn metric tonne-a-year port and terminal project at Hazira at more than a third of its capacity since opening in April 2005. The terminal, Shell’s first ever LNG import facility, imported three cargoes, or about 175,000 tonnes, in the first year of operations ending March 2006, Hartog said.

Total has a 26% stake in the project, according to Total’s website.

Shell is boosting LNG imports because fertiliser, power and petrochemical plants are switching from more expensive naphtha, an alternative to gas.

Petronet LNG Ltd, India’s first LNG importer, is in talks to lease Shell’s remaining capacity, Petronet managing director Prasad Dasgupta said on February 9. – Bloomberg

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