Shell, GDF to take 26% stake each in GAIL LNG terminal.

Royal Dutch Shell, Europe's largest oil company, and French firm GDF Suez are likely to take 26 per cent stake each in GAIL India Ltd's proposed 'floating LNG import terminal' at Kakinada in Andhra Pradesh.

Andhra Pradesh Gas Distribution Corp (APGDC) - a joint venture of GAIL Gas and Andhra Pradesh Gas Infrastructure Corp (APGIC) will hold the remaining 48 per cent, sources said.

An agreement to formalise the structure is likely to signed in next few days, they said.

GAIL Gas is a wholly-owned subsidiary of GAIL India, the nation's largest gas distribution and marketing company.

Sources said Andhra Pradesh government is pushing for an early start of work on the 3.5 million tons per annum floating storage and regasification unit (FSRU) off the Kakinada coast.

The partners will bring an FSRU, import gas in its liquefied form (LNG or liquefied natural gas) in ships to the terminal, pipe it to land and sell in Anhra Pradesh and beyond.

The start of work on the Kakinada FSRU would mean that Petronet LNG Ltd. will have to put off, at least, for the time being its proposed 5 million tons a year LNG import facility at Gangavaram in the same state.

Shell had in 2013 announced plans to build a floating LNG terminal of up to 5 million tonnes per annum capacity off Kakinada coast in a joint venture with Anil Ambani-led Reliance Group's Reliance Power.

But Reliance Power last year exited the project and Shell decided to join the GAIL-led project which was announced in 2011.

Sources said the FSRU is planned to be commissioned within two years.

The import terminal would have a 3.5-5 million tonnes per annum capacity and will be used to cater to gas demand in Andhra Pradesh and neighbouring states.


ET