The first ever LNG import terminal proposed on the east coast at Kakinada will have Shell and Gaz De France as partners if state government has its way in bringing the two oil majors together. State owned AP Gas Infrastructure Corporation along with the other partners, after conducting thorough studies and spending crores of rupees, decided to locate the terminal on the Southern side of the existing deepwater port. The 100 per cent subsidiary of Shell-Andhra LNG Pvt Ltd too wanted to set up its LNG import facility at the same location. It enjoys the strategic support of the port’s private operator Kakinada Sea Ports Limited which suggested that the state promoted JV move to the Northern side of the port.
The proposal will not only cost the state an additional expenditure of nearly Rs 300 crore but also expose the LNG import facility to natural calamities due geographical disadvantages. Ironically, the top brass of the administration succumbed under pressure and put off the crucial public hearing proposed by the state promoted JV with which the GDF is associated. Official sources told this newspaper that APIIC managing director Jayesh Ranjan was given a mandate by the CMO to negotiate between Shell and GDF and bring both players together to ensure smooth implementation of the project. Accordingly, Ranjan held a meeting with representatives of all the stakeholders including Shell and GDF on Tuesday and offered equal share to the two oil majors. “The state will benefit if the two experienced players joined hands to launch the project immediately. But, in the process, the government cannot not lose control of two important aspects — supply and price,” sources pointed out. The Chief Minister is keen on continuing the state’s role in the project so that the power utilities in the state are assured of gas at a relatively cheaper price, sources added.