Hindustan Petroleum Corp Ltd (HPCL) and Mumbai-based infrastructure major Shapoorji Pallonji will next week sign a joint venture pact to set up a terminal for import of liquid gas (LNG) on Gujarat coast at a cost of about Rs 5,000 crore.

The state-owned firm and SP Ports Pvt Ltd, a unit of Shapoorji Pallonji Group, plan to set up the liquefied natural gas (LNG) import terminal at Chhara in Gujarat’s Junagadh district through a 50:50 joint venture, HPCL Chairman and Managing Director S Roy Choudhury said here on Monday. “We will next week sign a joint venture agreement,” he said.

SP Ports is already developing a greenfield, all weather, direct berthing port in Junagadh district. HPCL and SP Ports are carrying out a detailed feasibility study for establishing technical and commercial viability of setting up a LNG import and regasification terminal of 5 million tonnes per annum capacity at the proposed Port.

The port is connected to a gas pipeline grid and evacuation of the fuel would not be an issue, he said.

“We are targetting three and half years for completion of the project from zero date,” he said.

HPCL, which owns a 6.5 million tons refinery at Mumbai and a 8.3 million tons unit at Vizag besides owning a quarter of 49,077 petrol pumps in the country, had missed on the LNG business in past but now wants to make up for it.

Gujarat already has two functional ports at Dahej and Hazira. A third one is under planning by Gujarat State Petroleum Corp (GSPC) and Larsen & Toubro (L&T) at Mundra. The Chhara terminal would be the fourth in the state.

India has three operational LNG import facilities - a 10 million tonnes unit at Dahej operated by Petronet LNG, a 3.6 million tonnes terminal of Shell-Total at Hazira in Gujarat, and a 5 million tonnes facility at Dahbol in Maharashtra. A similar capacity import facility will come up at Kochi in Kerala this year.

Currently, the Dahej and Hazira terminals are under expansion to 15 million tonnes and 5 million tonnes capacity, respectively. Dabhol capacity too is proposed to be doubled.

Also, GAIL and Shell are putting up separate floating LNG terminal at Kakianda, off Andhra Pradesh coast, while Petronet is building one at Gangavaram in the same state.

Indian Oil (IOC) is building a 5 million tonnes LNG terminal in Ennore, near Chennai, by 2016 at a cost of Rs 4,320 crore.

GSPC is also planning to commission an LNG terminal with a capacity of 5 million tonnes at Mundra by 2015-16.

The rush for LNG terminals is because domestic natural gas production of close to 144 million standard cubic meters per day is meeting just half of the demand. The demand for gas is projected to grow exponentially in future.

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