Shell India Pvt Ltd, which started commercial operations of its LNG terminal at Hazira in Gujarat three days ago, is now planning to expand the port facilities to include bulk cargo and container terminals.

"We are developing our Hazira port to set up a bulk container terminal, which would meet the needs of Essar Steel for handling iron ore and finished steel products. The container cargo will be developed with an investment of Rs.30 billion," Marc den Hartog, director of Shell India, told reporters here Tuesday.

With both the projects requiring considerable dredging, which may not be possible for four months during the monsoon season beginning June, the terminals may take over a year to be completed.

"We are yet to finalise the investment plan for the bulk cargo terminal. The work has, however, started on construction of the stockyard and road connectivity to the container terminal, which would have a phased capacity of 2 million tonnes TEUs (20-foot equivalent units)," Hartog said.

In partnership with the Gujarat government, Shell India has already started work on upgrading the 30-km road link to the port. RITES, the consultancy wing of the railways, has been assigned the task of studying a 30-km link to connect the port to the Mumbai-Baroda trunk route.

For execution of the container project, Shell India may set up a special purpose vehicle in partnership with a company having expertise in handling container facilities.

"As terminal operations are not a part of the core competency of Shell or Total, we are looking for partners with competency to handle management for the container terminal," he said.

Royal Dutch/Shell Group holds a 74 percent stake in the 2.5 million tonnes capacity Hazira LNG (Liquefied Natural Gas) terminal, while Total Gaz Electricite Holdings France holds the remaining 26 percent stake.

Shell is planning to expand the capacity of the terminal in due course to five or even 10 million tonnes as demand for LNG grows.

Currently, Shell has only one buyer - Gujarat State Petroleum Corporation (GSPC) - for its first consignment of 60,000 tonnes of LNG brought from Australia.

Shell India is facing tough competition from indigenously produced gas supplies and from Petronet LNG, which operates a five million tonnes capacity LNG terminal at Dahej.

Looking to possible participation in the revival of the Dabhol LNG terminal, which along with the power plant is still awaiting a resolution by stakeholders, Shell India is seeking alternate avenues like the container and cargo terminals to raise revenue.

--Indo-Asian News Services