Shell takes full control of Hazira LNG terminal

Shell has agreed to acquire the 26% of the Hazira LNG import terminal it does not already own from Total, the Paris-based LNG major. As a result of the binding letter of intent signed by the two companies, and subject to regulatory approval, Shell will hold a 100% interest in the Hazira facility, which is located 280 km north of Mumbai, in the northwestern Indian state of Gujarat.

In parallel, the duo signed an agreement under which Shell will buy 0.5 million tonnes per annum (mta) of LNG from Total over a period of five years, beginning in 2019 and provided on a delivered-ex-ship (DES) basis. Sourced from Total’s global LNG portfolio, the cargoes will be utilised to supply the markets of India and neighbouring countries.

“This deal enables Total to capture value through an asset disposal, while the LNG sales contract allows us to maintain the balance of our LNG portfolio,” said Total president gas, renewables and power Philippe Sauquet.

The Hazira LNG project comprises Hazira LNG Pte (HLPL) Ltd and Hazira Port Pte Ltd (HPPL). While HLPL operates the LNG regasification terminal, HPPL manages an adjacent direct-berthing, multi-cargo port.

Shell launched the Hazira scheme as India’s first privately owned LNG receiving facility in 2002 and Total joined the endeavour in 2004. The terminal was commissioned a year later, with a capacity to handle up to 2.5 mta of LNG; it was India’s first terminal to accept spot cargoes.

Capacity at Hazira was debottlenecked in 2008 to enable the receipt of up to 3.6 mta of LNG. A further expansion project boosted the throughput capability to the 5 mta level in 2015 and Shell has developed plans for doubling capacity to 10 mta, should the need arise.

Hazira LNG is connected to the main Hazira-Vijaipur-Jagdishpur (HVJ) and Dahej-Uran pipelines. These links provide the terminal with access to customers in Maharashtra, Gujarat, Rajasthan and the northern part of India. Users of the gas range from power stations and fertiliser manufacturers to ceramic and steel companies.