British Gas, Unocal want Shell to join LNG projects

0 July 1999
12 July 1999

Joint venture companies British Gas-Seaking and Unocal-Natelco, the promoters of the Pipavav and Maroli liquefied natural gas projects in Gujarat, are negotiating with Shell, the Anglo-Dutch multinational, for long-term partnership in these ventures. The talks are centred on fuel supply and a possible investment by Shell in the equity of these ventures.

Acknowledging this, Martin Foley, vice-president (gas and power), Shell India, says, "We are looking at both projects with great interest. Our role in these projects could amount to long-term supply of LNG and may also lead to Shell picking up equity stakes."

British Gas and Seaking Engineers Ltd together hold 50 per cent of Pipavav's $160 million equity, and the National Power Thermal Corporation is expected to invest $42 million to pick up 26 per cent. The total cost of the Pipavav venture is $450 million.

According to Mr Foley the American energy group Unocal had also approached his company with a similar proposal for the Rs 2,600-crore Maroli LNG project.

The Pipavav project will have a capacity of 5.3 million tonnes per annum, while the Maroli project is expected to produce 2 million tonnes of LNG annually.

Shell is one of the largest private LNG suppliers in the world, and its expertise could add substantial value to the projects, industry observers say. The Anglo-Dutch group also has a strong presence in the Middle East, and is therefore strategically placed to supply fuel to India.