India's H-Energy to start west coast LNG terminal in May 2018

MUMBAI (Reuters) — India's H-Energy Pvt Ltd, a unit of real estate group Hiranandani, will start operations at its LNG terminal in the western Maharashtra state by May 2018, its chief executive said on Wednesday.

Photo courtesy of H-Energy.

India plans to raise the share of natural gas in its energy mix to 15% in 3 yr from the current 6.5%, according to a plan set out by Prime Minister Narendra Modi's government.

H-Energy has invested $261 MM to build its 4 MMtpy regassification terminal near the Jaigarh port in the state, Darshan Hiranandani told Reuters.

LNG, a super-cooled natural gas, is imported in liquid form and is regasified at the terminals for supplies to end users.

"We have already laid a 60 km pipeline connecting our plant to the Jaigarh port," Hiranandani said, adding his firm would initially import spot cargoes to make the super cooled fuel affordable to price sensitive Indian customers.

The global market is currently flooded with cheap LNG with many suppliers queuing up to sell volumes to India on a spot basis, a senior gas consultant said.

Average spot LNG price for October delivery stood at $8.08/MMBtu, according to a note issued by brokerage Emkay Global.

The company aims to expand the plant to 10 MMtpy, Hiranandani said.

Before embarking on the next phase of expansion, the CEO said the company wanted to first build a 600 km pipeline to connect its plant to the southern city of Mangalore.

H-Energy is among the three companies in India which will be adding LNG capacity to a gas-hungry nation in 2018. The other two projects are a 5 MMtpy terminal at Ennore on the eastern coast and a 5 MMtpy terminal at Mundra in Gujarat in the west.

H-Energy is also building another LNG terminal off the coast of Kolkata in the Bay of Bengal. The construction for that 2 MMtpy plant will begin next year, said Hiranandani.

Reporting by Nidhi Verma; Editing by Mark Potter

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