Reliance Power Walks Out of India LNG Project

Reliance Power has decided to walk out from a liquefied natural gas project with Shell at the Kakinada Deepwater port in Andhra Pradesh, India, according to local media reports.

The LNG project was originally envisaged as a 50:50 partnership between Shell and Reliance Power, but this year the two sides agreed that “the best way forward to ensure a speedy implementation of the project was for Shell to take full control. The project is currently a 100% Shell project,” The Economic Times cited Roger Bounds, global head of Shell’s LNG business, as saying.

The LNG project is expected to start with a capacity up to 5 million tons per annum (mtpa) and is designed for easy expandability to 10+ mtpa to meet the surging demand for gas in the region.

“Nearly 80% of Andhra Pradesh’s gas demand today remains unmet. This shortage of gas and the rapid growth of LNG imports, which is nearly 33% of overall gas supply, indicates that the gas demand cannot be met by domestic sources alone. Shell therefore, based on its experience in Gujarat, believes that setting up an LNG terminal in Andhra Pradesh will help in meeting this large demand of gas in the state,” Bounds said.

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LNG World News Staff, September 9, 2013; Image: Shell