Six years after forming a 50:50 joint venture–HPCL Shapoorji Energy Pvt Ltd–to set up a 5 mtpa liquefied natural gas terminal at Chhara in Gujarat, partners Hindustan Petroleum Corp Ltd and the Shapoorji Group have awarded 25 bln rupees worth of engineering, procurement and construction contracts to begin construction at the project site, sources said.
"HSEPL has awarded the consortium of IHI Corp and AFCONS Infrastructure Ltd an engineering, procurement, and construction contract for LNG storage tanks, and another EPC contract for construction of regassification facilities at the terminal to Toyo Engineering India Pvt Ltd," a source familiar with the development said.
Both the partners have been trying to enter the liquefied natural gas business for long. HPCL, which is involved in the gas distribution business across the country, had earlier unsuccessfully tried to be part of the country's first state-owned LNG terminal, the one owned by Petronet LNG Ltd, at Dahej. The Shapoorji Group, meanwhile, is said to have been keen on entering the gas trading business through this terminal. The joint venture partners did not reply to queries with regard to the latest development.
The Chhara terminal would be the fifth LNG terminal in Gujarat and will cost a little over 50 bln rupees. Other liquefied natural gas terminals in Gujarat include the Petronet LNG terminal at Dahej, the Hazira LNG terminal, the Mundra LNG terminal, and Swan Ltd's under construction terminal at Jaffrabad. The total capacity of liquefied natural gas terminals in the state could reach 37.5 mtpa or more, depending on expansion at other terminals.
"They have been waiting for environmental nod for the project which they got in March, and hope to complete physical work at the terminal in the next 30 months," a source said. "It hopes to begin docking LNG tankers and pumping out LNG from its terminal by the second half of 2022."
The group is also learnt to have begun work on constructing a breakwater, and has also entered into a gas transmission agreement with Gujarat State Petronet Ltd, which would lay an 85 km pipeline from Pipavav to Chhara and help transmit up to 24 mscmd of gas in the first phase of the project.
HPCL Shapoorji Energy, through its LNG terminal, hopes to tap into LNG-deficit markets of Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Punjab, Uttar Pradesh, Delhi, Goa, Himachal Pradesh, Uttarakhand, and Jammu & Kashmir. Today, shares of Hindustan Petroleum Corp ended 1% higher at 308.65 rupees on the National Stock Exchange. End