Jun 03: The 5 MNTPA, Rs 5500 crore Mundra LNG terminal is fully commissioned but lying idle for want of a settlement between the two warring JV partners, the Adanis and GSPC. Adani holds a 25% shareholding while GSPC has another 50%. Former PNGRB chairman Labanendu Mansingh is working as a mediator between the two groups but progress has been slow.
8But as and when the two factions come to a settlement, as they finally have to, the Mundra terminal is eventually the best placed among all new terminals to give Petronet LNG Ltd a run for its money
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The differences which have to be sorted out between the Adani-GSPC JV are over GSPC's unwillingness to fully pay up for Adani's investments on port development and dredging, involving a total of Rs 1200 crore. The other area of dispute is over who is going to foot the year Rs 65 crore expense on the lease of land from the Gujarat Maritime Board for the LNG terminal. Then again there is a demand from GSPC for the control of the entire waterfront area for the LNG terminal, through a sublease to GSPC.
 
 But the point to note is that the JV is the only new LNG terminal which has full access to the 2500 km Gujarat Gas network via the completed 60 km Mundra-Anjar pipeline. The pipeline was completed by the end of 2018 ahead of the commissioning of the LNG terminal. A tolling model is being adopted, allowing customers to bring in their cargoes. "We are offering a more competitive tolling model than what Petronet LNG is offering at Dahej at Rs 50/mmbtu. Many buyers are looking at getting away from a monopoly. What is more, international traders are keenly interested in our tolling model, as a substitute to what is being offered by PLL," a senior source in GSPC LNG Ltd, the JV company, told this website. Refusing to comment on the Adani-GSPC dispute, the same executive said, "It is happening at the government level, and our news is that a solution is getting hammered through."
 
 The problem with the Dahej terminal of Petronet LNG is that it seems to be running at full capacity. Currently, given the wide differential between spot and contract LNG prices, there is a storage issue too at Dahej as offtakers are finding it a little difficult to push through long term contract quantities in the face of far cheaper spot cargo availability. "This is the time when the Mundra terminal can offload cheap spot cargoes and bring it into the Gujarat network and onwards to other networks," the executive said. In comparison to Mundra, and besides Dahej and Shell's Hazira terminal (which is also running at full capacity for the last one and half years), both Kochi and Ennore have evacuation constraints. The Kochi problem is already well known and even Ennore seems to be finding it difficult to expand its pipeline footprint, leaving it with just four big customers to deal with as of now.
 
 Petronet LNG is now trying to expand, by building more tankage facility. There is going to be a commissioning of additional capacity in June itself, and that is likely to ease the utilization and storage situation there.
 
 Shell too, now running at full utilization, with its capacity expanding from 2.5 MMTPA to 3.60 MMTPA already, will have to take some ambitious bets on India as their tolling model is currently eminently suitable for India. Now that the JV with Total is vanquished, and Shell has full control of the terminal, it can pretty much script is own story on the LNG map in India. Shell is the largest owner of global LNG capacity, with a huge trading arm.