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GSPC in talks with Adani, Essar for LNG terminal JV
11 December 2006

Soon after announcing a Rs 5,000 crore, 5-million tonne liquefied natural gas (LNG) import and re-gasification terminal in western Gujarat within the next five years, state-owned Gujarat State Petroleum Corporation (GSPC) is now in talks with corporates involved in port development for a joint venture for the project. According to industry sources, GSPC is in talks with companies including Adani and Essar Group for a joint venture (JV). The company is likely to put up its LNG import terminal at Pipavav or at Mundra port in Gujarat. 
 GSPC was at present verifying the maritime perspective and other feasibility reports from its consultants, sources added. Western Gujarat has a significant LNG market.

The five year tax holiday given to companies in the Kutch region ever since the devastating earthquake of 2001 has attracted a number of heavy industries including fertilizer, chemical and saw pipes firms, who are willing to buy re-gasified LNG at the current spot prices. Currently, India has a gas supply of 24.25 million metric tonne per annum (MMTPA), and an additional gas requirement of 32.5 MMTPA, which would go up to 56.75 MMTPA by 2010. The Kutch region also has two major SEZs, Kandla and Mundra, which will create further demand for LNG.

GSPC planned to retain almost 26% stake in the proposed LNG terminal and offer the rest to various investors in its project, the source said. The Adani Group in the fray with its company Gujarat Adani Energy implementing gas networks in the cities of Ahmedabad and Vadodara in Gujarat. When contacted, a senior Adani Group official said that investment talks in GSPC’s project were still at a preliminary stage. However, an Essar spokesman declined to comment.

At present, Gujarat has two LNG terminals including Petronet LNG’s 5 million tonne import terminal at Dahej and Shell’s 2.5 million tonne facility at Hazira. Petronet is doubling the Dahej capacity by 2010, while the Hazira capacity can go up to 5 million tonne.

Courtesy - Financial Express - Bombay,India kutchhis globally , from Mumbai

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