April 28, 2015 / 2:17 PM / 4 years ago

Shell to raise Hazira LNG plant capacity by 50 percent in 2016/17

NEW DELHI (Reuters) - Hazira LNG Ltd will expand the capacity of its liquefied natural gas (LNG) terminal on the west coast by 50 percent to 7.5 million tonnes per annum (mtpa) in the fiscal year to March 2017, a government panel report said.

A passenger plane flies over a Shell logo at a petrol station in west London, January 29, 2015. REUTERS/Toby Melville/Files

Royal Dutch Shell owns through its unit Shell Gas a 74 percent stake in Hazira LNG, while Total Gaz Electricite France, a unit of France’s Total, holds the remainder.

India is expanding the capacity of its gas import facilities, part of efforts to increase the share of cleaner fuel in its energy mix to improve air quality.

India currently has infrastructure to annually import and regassify 25 million tonnes of the super-cooled fuel and the capacity of the existing facilities is expected to rise to 41 mtpa in 2016/17.

The report said that new terminals with capacities of up to 27 mtpa were at various stages of planning on both the eastern and western coasts of India.

“The increase in (Hazira LNG) capacity from 5 million to 7.5 million tonnes a year will become available at the end of year 2016/17,” the report said.

Shell did not respond to a request for comment.

With a 26 percent stake, Shell is also part of a consortium building Kakinada LNG on the east coast.

In the current fiscal year India’s gas deficit is expected to widen to 300 million standard cubic metres a day (mscmd) from 152 mscmd in 2012/13, the report said.

India’s local gas production currently falls far short of what was planned, due mainly to a significant decline in the output of Reliance Industries Ltd-operated KG-D6 block on the east coast.

Reliance and partner BP have blamed geological complexities for the fall in output, but the oil regulator believes they failed to drill enough wells.

Falling output had already prompted the government to disallow about $2.4 billion in cost recovery to Reliance up to 2013/14, leading to arbitration proceedings over the issue.

Reporting by Nidhi Verma; Editing by Gareth Jones

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