Shell, R-Power join hands for floating gas terminal

Royal Dutch Shell, Reliance Power and Kakinada Seaports today said they will jointly set up a floating liquefied natural gas terminal at Kakinada in Andhra Pradesh to facilitate imports of the fuel.

The terminal will help Anil Ambani's Reliance Power to secure fuel supplies for its 2,400 MW gas-fired project at Samalkot in Andhra Pradesh.

Reliance Power plant and another 5,000 MW power project are almost ready in India but can't operate because of a local gas shortage.

India's gas-based plants are facing uncertainty over supply as output from the Krishna-Godavari D6 field in the Bay of Bengal operated by Mukesh Ambani's Reliance Industries Ltd has declined sharply, forcing power producers to look for substitutes.

Kakinada is also the landfall point D6 gas, and a near 1,400-km line carries the fuel from there to western centres of distribution.

A joint statement by Shell and Reliance power said a joint venture company would be created to set up an LNG terminal with an initial capacity of up to 5 million tonnes per annum at Kakinada deepwater port. Kakinada Seaports operates the Kakinada port.