Hiranandani Group outfit H-Energy is planning to sell up to a 20% stake in its liquefied natural gas (LNG) project at Jaigarh in Maharashtra, two people aware of the matter said. H-Energy Pvt. Ltd, the energy arm of the real estate developer, is building the project across two phases. “H-Energy is seeking partners in its LNG terminal. It may offload anywhere up to a 20% stake,” said an investment banker aware of the development. He spoke on condition of anonymity as he is not authorized to talk to the media.
H-Energy is building two LNG terminals: one in Jaigarh and the second, a floating LNG import terminal off Haldia, West Bengal. In an emailed response, H-Energy said, “H-Energy has been approached by 11 players over the last 24 months but has not done any transaction as it did not find any partnership worthwhile.” LNG is natural gas cooled into a liquid state for storage and transportation. H-Energy has invested Rs 17 billion in the project so far. In the first phase, it will build a jetty-based floating storage re-gasification unit (FSRU) of 4 million tonnes per annum capacity, which is expected to start by May 2018.
In the second phase, a re-gasification terminal will come up. Once operational, this will be the fifth LNG import terminal on the west coast. The west coast already has four LNG import terminals including Dahej and Hazira in Gujarat; Dabhol in Maharashtra and Kochi in Kerala. Jaigarh also houses the 5 million tonne Dabhol LNG terminal operated by gas utility GAIL India Ltd. H-Energy is also building a floating LNG import terminal off Haldia in West Bengal.
India is planning to raise the share of natural gas in its energy mix to 15% in three years from the present 6.5%. According to a 31 October Care Ratings report, India imports a significant amount of natural gas in the form of LNG from Qatar, Nigeria, Equatorial Guinea, and the United Arab Emirates, among other nations. Qatar accounts for around 62% of overall LNG imports by India, followed by Nigeria (12%). H-Energy’s terminals will be tolling terminals, meaning third parties can import LNG for a fee. Floating storage re-gasification units are cheaper than land-based LNG receiving terminals; converting LNG shipped from multiple suppliers back into gas, before transferring it onshore. “H-Energy is in an advanced stage of execution of Phase-I of the project. Jetty construction work for the project has commenced at Jaigarh Port and it is expected to be completed by third quarter of 2017.
The company has acquired land for the onshore receiving facility close to the Jetty where the FSRU will be moored and has started work on the Jaigarh to Dabhol tie-in pipeline which will carry re-gasified LNG to the Natural Gas Grid of GAIL at Dabhol,” H-Energy states on its website. In April, H-Energy hired a floating LNG terminal from French group Engie and said it hopes to start operations at the Jaigarh port from end 2018. The floating storage re-gasification unit has been chartered by H-Energy for five years.