Reliance Power and energy giant Shell are in talks to jointly set up India’s first east-coast LNG terminal to fuel factories and power plants that are eyeing imports as output from the D6 block has fallen sharply. Several companies, including Petronet LNG, the country’s biggest gas importer, are considering setting up a terminal on the east coast. Power projects with a total capacity of about 7,000 mw, including Reliance Power’s Samalkot project, would be stranded due to gas scarcity, as local gas is scarce and importing LNG from existing facilities on the west coast is not economically viable.
The proposed new terminal is expected to involve an investment of Rs 3,000 crore. Shell operates an LNG terminal on the west coast in Hazira, Gujarat, which it set up with an initial capacity of 2.5 million tonnes per annum (mtpa). Its capacity is being increased to 5 mtpa, but the additional capacity cannot be used by customers on the east coast because of high transportation charges and local taxes.
