Bharat Shell To Invest Rs 198 Cr In Lpg Terminals

Bharat Shell India, the lubricants major, is investing Rs 198 crore in liquefied petroleum gas (LPG) handling facilities in Gujarat and Andhra Pradesh.

The company will be constructing a hydrocarbon import terminal at Kakinada in Andhra Pradesh on build, operate and transfer (BOT) basis and an LPG import terminal for supplying to southern markets.

The lease will be for 20 to 30 years and will have a capacity to import 200,000 tonnes per annum.

Bharat Shell is also building another Rs 48-crore LPG import terminal at Pipavav in Gujarat to cater the demand in northern markets. The projects will be completed by 1999.

 

It has raised its equity from Rs 130 crore to Rs 250 crore to fund the project. Its partners, Shell Overseas Investments of Netherlands and Bharat Petroleum Corporation (BPCL), with 51 per cent and 49 per cent respectively, will contribute funds to Bharat Shell.

The Foreign Investment Promotion Board has cleared the equity hike.

The companys Rs 77-crore plant at Taloja in Maharashtra, its first lubricants plant in the country, can produce 55,000 tonnes on a single-shift basis and 110,000 tonnes on a two-shift basis.

Luv Chhabra, deputy managing director of Bharat Shell said the company is focussing more on LPG production as it is an important growth area.

Even with a limited supply, demand is growing at 15 per cent. If supply is improved, demand growth will be much higher, he said.

At present, Bharat Shell is importing LPG from the Jawaharlal Nehru Port Trust (JNPT). But inadequate capacity and delay in unloading have prevented the company from supplying to a large area. Its area of operation is restricted to North-East Mumbai, Thane and New Mumbai.

While the Gujarat and Kakinada terminals will cater to southern and northern markets, Bharat Shell has taken another terminal on lease at Ratnagiri district in Maharashtra which will supply to the western region.

The Taloja plant will produce both automotive and industrial lubricants.

Chhabra said the company is planning to increase its advertisement and marketing expenditure to push sales.

Bharat Shells lubricants sales volume is 36,000 tonnes against Bharat Petroleums 85,000 tonnes.

BPCL markets is own middle- and mass-market brands while the joint venture markets only Shell brands.

Meanwhile, Shell India, the 100-per cent subsidiary of Royal Dutch Shell, is waiting for the outcome of the court case against the companys plans to set up a seven million-tonne refinery in Uttar Pradesh in collaboration with BPCL. Proposed at Sultanpur district in UP, the project has been affected owing to opposition from locals.

Chhabra said Shell is still keen on the location but is not averse to moving out to other parts of UP in case of an adverse verdict.