Reliance Power Pulls Out of India LNG Project With Shell

Reliance Power has decided to walk out from LNG terminal project with Shell on India’s east coast.

However, Shell remains bullish on India and has decided to complete the project on its own in the market, reported Economic Times.

The project was originally envisaged as a 50:50 partnership between Shell and Reliance Power. But this year two sides agreed that the best way forward to ensure a speedy implementation of the project was for Shell to take full control.

According to Economic Times, Shell finds the Indian market attractive and is not deterred by the economic downturn. "Shell normally takes a long-term view of the markets it is looking to invest in and the fundamentals of the Indian energy demand and supply situation remain unchanged," Roger Bounds, global head of Shell's LNG business was quoted by the newspaper as saying.

An industry official told Economic Times that rise in LNG prices in recent years has made the imported fuel unattractive for Reliance Power, but the company would be interested in LNG if prices fall in the future.

Shell already operates a terminal to import liquefied natural gas (LNG) at Hazira on the west coast with a capacity of 5 MT a year. The new terminal would have the same capacity, which can be doubled.