HPCL board okays joint venture with Shapoorji Pallonji for LNG terminal

The board of public sector oil firm Hindustan Petroleum Corp. Ltd (HPCL) has approved the proposed joint venture with infrastructure major Shapoorji Pallonji for building a terminal for importing liquefied natural gas (LNG).

According to sources, both companies will hold an equal stake in the joint venture.

The Rs 5,000-crore terminal will have a 5-million-tonnes-per-annum capacity and will be will be set up in Chhara, Gujarat. The terminal will take around three years to complete, the sources added.

The board has also approved a 9-million-tonne refinery in Rajasthan, with a revised configuration. The final call on this will be taken by the state government and the Centre.

The proposed refinery plans to process imported crude and domestic crude -- majorly produced by the Cairn India oil block in Rajasthan -- in equal proportions, said an official on condition of anonymity. The official, however, refused to give any further details.

The present gas supply in India meets only half the demand, which is about 300 million standard cubic meter a day (mmscmd). Experts say domestic gas production is likely to grow by only 10-15 per cent, but the demand is growing at a rate of 25-30 per cent, making imports the only option.

The proposed LNG terminal in Chhara would be the fourth one in Gujarat. Petronet LNG and Royal Dutch Shell already have operational terminals in Dahej and Hazira, respectively, while Gujarat State Petroleum Corp. is building one at Mundra.