Shell Makes Progress on Andhra LNG Project (India)

Shell and Kakinada Seaports (KSPL) have achieved two important milestones towards implementing the Andhra LNG import terminal project with the submission of the draft Environmental Impact Assessment report and the signing of the Port Services Agreement.

The draft Environmental Impact Assessment report for the proposed development of the Andhra LNG terminal at the Kakinada deepwater port was recently submitted to the State Pollution Control Board in Kakinada. On the 11th of April 2013, Shell and KSPL signed the Port Services Agreement, setting out the commercial arrangements underlying the development and operation of the required port facilities for the entire duration of the project.

Roger Bounds, Shell Vice President Global LNG said “Shell welcomes the signing of the Port Services Agreement and the imminent public hearing on the site following the submission of the draft EIA. The Kakinada project uniquely benefits from Shell’s presence in several existing and planned LNG supply projects around the world which will help ensure diversity and security of supply to the State of Andhra Pradesh”.

Dr Yasmine Hilton, Chairman of Shell Companies in India said, “India is an important market for LNG and the states of Gujarat and Andhra Pradesh (AP) are key markets for gas in India. After the success of Shell’s Hazira terminal on the west coast in Gujarat, Shell is keen to set up an LNG receiving terminal on the East coast in AP. We are delighted with the rapid progress we have made and we look forward to successfully implementing the first Floating and Storage Regasification Unit (FSRU) in India with our partners”.

The project, which was conceived by Shell and its partners in 2011, is now rapidly advancing to fruition. The technical scope development and associated execution plan is nearing its completion. The project is progressing as per plan and is on track to potentially becoming the first LNG import terminal on the East Coast.  The terminal will start with a capacity of 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.

Shell with its global experience in project delivery and its specific experience in LNG and LNG regasification and FSRU projects is ideally placed to successfully, efficiently and timely deliver this important project for Andhra Pradesh.

Shell has since established the project company by the name of Andhra LNG Pvt Ltd as the venture to develop, implement and operate the LNG import and regasification terminal.

Dr Sander Stegenga, senior Shell LNG manager and Andhra LNG Pvt Ltd Chief Executive Officer, said “The signing of the PSA with KSPL and submission of the EIA report mark important milestones in the development of the project, and brings Shell and KSPL a step closer to delivering the much needed gas supply to Andhra Pradesh and contributing towards the development of gas driven economic growth in the State”.

The potential establishment of the LNG import and regasification terminal at the Kakinada Deepwater port in Andhra Pradesh would represent the next significant Foreign Direct Investment for Shell in the country and Andhra Pradesh.

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Shell, May 13, 2013