Mumbai: With natural gas prices shooting up globally, Essar Ports is going slow on its plans to build liquefied natural gas terminals at the Hazira port in Gujarat, chief executive officer Rajiv Agarwal told Mint.

Last September, the Ruia family-promoted Essar Ports announced its intent to build a cluster of four LNG terminals, with capacities of 2.5-5 million tonnes per annum (mtpa) to cash in on the growing demand for clean fuel.

“We are still working on this proposal; we’re getting environment approvals for Hazira and studies are being done," said Agarwal. “But work will take at least 15 more months to start."

“Look at the price of LNG," he said. “If the outlook turns positive, we will set up the terminals. Otherwise, we will slow it down. When we first talked about setting up these terminals, LNG prices were at $5-6 per million British thermal unit (mmBtu). Now it’s $10-11 mmBtu; so who’s going to buy? We’re watching what direction crude and LNG prices take."

Asian spot prices of imported LNG rose to their highest levels this summer since mid-2014 because of production cuts in the US, Australia and Malaysia while China ramped up LNG procurement in recent months to offset air pollution levels, making it the world’s second-largest LNG buyer after Japan. While spot prices for July delivery in North Asia reached a high of $11.6 mmBtu, at the same time last year, prices had hovered at the $6 mmBtu mark.

India has LNG terminal capacity of 21.25mtpa belonging to Indian Oil Corporation, Petronet LNG and Shell.

The three companies are also working on increasing the capacity to 56mtpa by 2020.

Essar Ports, which develops and operates ports and terminals to handle liquid, dry bulk, break bulk and general cargo, is also ramping up its dry bulk cargo handling capacity at Hazira.

Besides, Essar Ports operates three more terminals, Salaya on the west coast and Visakhapatnam and Paradip on the east coast.

The operational capacity of port terminals is 95mtpa, and is expected to increase to 110 mtpa by 2020. Agarwal had recently said Essar Ports would be investing $70 million to increase the capacity at Hazira from its current 30mtpa to 50mtpa by 2020.

Last week, Essar Ports commissioned a 24 mtpa iron ore handling complex at Vizag port. Essar Vizag Terminal Ltd will operate the berth on a 30-year concession from the Vizag port trust.

Agarwal said Essar Ports reported revenue of $190 million in fiscal 2018.

The company’s current debt stands at $600 million. It has a debt-to-equity ratio of 1.6.

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