Shell’s Floating LNG Facility Soon In Kakinada

Written by

Andhra Pradesh seems to be going on a full throttle with development. After BEL, it is now the turn of global energy giant Royal Dutch Shell.

The world class energy player that set up a 5 million tonne LNG terminal at Hazira in Gujarat a decade ago, is now targeting to grab Indian market. To this effect, the Hague-based global energy giant is planning to set up a floating LNG facility at Kakinada in Andhra Pradesh.

Lately, an MoU was signed between Andhra Pradesh Gas Distribution Corporation (APGDC), GDF Suez, Shell and GAIL to set up a floating LNG terminal with an initial capacity of 5 mt, which could be doubled at a later stage. “We have been very constructively working on the project (LNG terminal) on the east coast. We really believe in the India gas market,” Maaten Wetselaar, executive vice present for Shell Integrated Gas in Singapore said, while talking to a leading newspaper daily.

The details of the cost metrics still unknown, this 5 MT LNG terminal is expected to cost around $1 billion. India is presently the world’s fourth-largest LNG importer, following Japan, South Korea and China, consuming almost 6% of the global market.

Shell sees a big future for gas in India and is keen to open the shop on the east coast. The company is currently working with the partner inorder to make this happen.

India gas consumption boils to 100-110 million metric standard cubic metre perday (mmscmd). Of this, about 30-35% is sourced through R-LNG.

Shell strongly believes that floating LNG terminal will the next big thing. A floating LNG terminal apparently reduces the cost of the project, as there is zero need for long pipelines to onshore terminal, compression platforms to push gas to the shore, near shore works such as dredging and jetty construction, and onshore development such as building roads, lay-down areas and accommodation facilities. Shell has a strong balance sheet and is closely mindful about its overseas investment strategies.

The global player expects LNG demand to rise by 5% every year over the next couple of decades, while global gas demand is growing at 2% per year till 2030. LNG market is expected to hit 460 mtpa, against 240 mtpa in 2014.  Expectations are forth with growing demands from countries like China, Middle East and Europe and the new markets such as India, Malaysia, Philippines, Singapore, Thialand and Vietnam.



Article Categories:
Menu Title