Essar Slows Down on India Terminal Plan: Report

Indian private sector firm Essar may go slow on its plan to develop an LNG import terminal at Hazira port in the western Indian state of Gujarat thanks to rising LNG prices, company CEO Rajiv Agarwal told Mint.

“We are still working on this proposal; we’re getting environment approvals for Hazira and studies are being done,” the newspaper quoted Agarwal saying July 17. “But work will take at least 15 more months to start.” Plan to develop the terminal was announced in September last year.

“Look at the price of LNG,” he said. “If the outlook turns positive, we will set up the terminals. Otherwise, we will slow it down. When we first talked about setting up these terminals, LNG prices were at $5-6/mn Btu. Now it’s $10-11/mm Btu; so who’s going to buy? We’re watching what direction crude and LNG prices take.”

Apart from Essar, a number of other state-owned and private firms are developing both floating and land-based terminals on India’s west and east coasts. Mumbai-based H-Energy has proposed one floating LNG storage and regasification unit (FRSU) on India’s west coast and another on the east coast. The FSRU on the west coast is expected to be on stream by the end of this year. State-owned Indian Oil Corporation is developing a land-based terminal on the east coast. Similarly, private sector company Swan Energy is planning one FSRU-based terminal on west coast. India’s oil ministry expects country's regasification capacity to significantly increase by 2021.