Structuring of IPP projects in India through its international arm Intergen, offering gas from its huge gas reserves in Bangladesh for power and fertilizer projects in India, forming joint ventures with leading power companies to undertake power distribution, besides offering LNG to NTPC at concessional rates from its LNG terminal at Hazira are some of the proposals made by Shell to the ministry of power.

Top government officials told The Financial Express

that detailed discussions in this regard took place last week, between the Union power minister Suresh Prabhu and the president and managing director of Royal Dutch/Shell group of companies Jeroen Van der Veer. The proposals of Shell, officials said, are under active consideration of the ministry.

Giving details, officials disclosed that Shell has offered to supply LNG to the four LNG-based projects, of National Thermal Power Corporation (NTPC) namely Anta, Auraiya, Kawas and Gandhar at competitive prices, may be even less than what have been offered by other LNG companies.

"In order to discuss the details as regards the supply, quality of LNG, a detailed structured meeting with NTPC big wigs is scheduled for this week. A memorandum of understanding (MoU) is also likely to be signed between Shell and NTPC," officials added.

The LNG will be supplied from Shell's proposed LNG terminal at Hazira. The LNG-based power projects of NTPC have been kept in cold staorage for quite sometime, due to a sudden spurt in the prices of international crude oil which created a direct impact on LNG prices.

On structuring of IPP projects, officials said, the recent fallout of private power projects in India has become a matter of deep concern for the government.

"Shell has offered its services to re-structure such projects through Intergen. This company, in which Shell is an equity partner, is a leading name in structuring of private power projects," officials said.

In addition to this, Shell has informed that it has huge gas reserves in Bangladesh and can offer gas to India for use in its power and fertilizer sectors. For this, there can be either direct import of gas or a power plant can be set up in Bangladesh and India can in turn import power from this gas-based power project.

"The issues related with utilisation of its gas reserves will have to be dealt with at the diplomatic level. A government-to-government dialogue will soon be initiated over this and the details will be chalked out accordingly," officials said.

Shell has also evinced interest in participating in India's efforts to privatize distribution. However, since Shell does not have adequate expertise in this field, it is ready to form joint ventures with leading Indian distribution companies such as BSES, Tata Electric for taking over distribution circles, officials said.

It may be mentioned here that Shell is trying its best to bring its Hazira terminal ahead of its rivals such as Petronet LNG Ltd. Shell's proposed terminal at Hazira has lot of advantages in terms of its location. As a port Hazira is far better than Dahej, where Petronet LNG proposes to set up its terminal.

Earlier, NTPC was talking to Petronet LNG for meeting LNG requirements of its power plants. However, locational disadvantage coupled with increase in international crude prices was resulting into high costs, as a result of which the talks with Petronet LNG ran into rough weather.