Total’s 26% equity in the Hazira LNG and Port venture located in Gujarat, India would be taken over by Shell Gas B.V., a subsidiary of Royal Dutch Shell Plc. The announcement of the agreement was made on Monday. No financial details of the deal were announced by the company.
In the meanwhile, Shell is also seeking to source LNG from France’s Total.
“Like any competitive business, Shell continuously seeks opportunities to grow. We can confirm that we are also talking with Total for the potential supply of liquefied natural gas (LNG). We have no further comments at this time,” the company said in media response on the issue.
With the completion of the deal, Shell will hold 100% stake in Hazira LNG and Port and it will also mark an exit from Total form the project.
Hazira LNG Pvt Ltd that runs an LNG re-gasification terminal in Gujarat and Hazira Port Pvt Ltd that operates a direct berthing multi-cargo port at Hazira make up the Hazira LNG and Port project.
The deal would give Shell the opportunity to achieve commercial and operational flexibility over Hazira and thereby maximize integrated value according to a press statement form the company. it will also help Shell to give creative customer value propositions,
The ₹3,000 crore Hazira LNG terminal and port facilities is amongst the largest foreign direct investment in India in the energy sector according to the official website of Shell India.
“Today marks an important milestone,” said Maarten Wetselaar, Shell’s integrated gas & new energies director. “This purchase creates a fully owned and integrated Shell value chain – supply from our global LNG portfolio, re-gasification at the Hazira facility, and downstream customer sales. It enables Shell to better serve Indian customers and meet the country’s long-term need for more and cleaner energy. This also significantly strengthens the connection of the fastest growing gas markets in the world, India, and Shell’s unrivaled portfolio of competitive gas supply.”
Compared to an initial gasification capacity of 2 million tonnes per annum (mtpa) in 2005 at the time of the commissioning of Hazira LNG, the capacity reached 3 mtpa in 2008 and then to 5 mtpa in 2013.
According to industry experts, the de3la for Shell is an important one because the company would gain complete control of the port and LNG business which is critical given the growing rise in demand for LNG in India and the strategic positioning of the Hazira. The dela would also be an important key for Shell’s expansion plans if any.
“The current capacity of the Hazira terminal is 5 million tonnes per annum. We have completed the technical studies to look at what would be the optimal configuration/re-gasification technology for further expansion of the Hazira terminal. Any investment decision will be subject to market maturity and future demand growth,” Shell said in its e-mail response for the media.
(Adapted from LiveMint.com)