France’s Total SA and Royal Dutch Shell Plc plan to expand capacity of their liquefied natural gas terminal in western India by more than a third, buoyed by strong demand for the fuel in the country, a senior Shell executive said.
“We are indeed expanding capacity at our LNG terminal [in a joint venture with Total] at Hazira to 5 million tons from 3.6 million tons. This will come online early in the second quarter of 2012,” Deepak Mukarji, Shell’s country head of corporate affairs in India said in an e-mail on Wednesday.
Mukarji didn’t provide any investment details.
India’s natural gas supply has been hit as output from Reliance Industries Ltd.’s D6 block in the Krishna Godavari basin off India’s east coast has declined to 42 million standard cubic meters a day against a target of 69 mmscmd. Demand for gas is rising due to fast-expanding power stations and industries, boosting LNG imports.
Credit-rating firm ICRA Ltd. last month forecast India’s gas demand to rise to around 410 mmscmd by March 2010 from around 177 mmscmd in the year ended March 31, further increasing reliance on LNG.
“We are very upbeat about LNG demand in India,” Mukarji said.
Shell and Total’s expansion plans are in line with larger peer Petronet LNG Ltd., which in October said it will raise its LNG regasification capacity by one-and-a-half times to 25 million tons by 2015.
Mukarji said India needs to fast expand its pipeline infrastructure to fully realize the potential of gas as a fuel.
