Reliance Power and Shell in talks over India LNG terminal

Indian utility Reliance Power is in talks with energy major Royal Dutch Shell to jointly set up a liquefied natural gas (LNG) terminal to secure supplies for its gas-fired power plant, Reuters reports.

"Reliance Power keeps exploring various business opportunities. The company would not like to comment on specific business proposal," the utility said in an e-mail response to Reuters.

Reports state the two companies will hold equal stake in the joint venture and Kakinada port in the southern Andhra Pradesh state will own a minority stake.

The proposed venture will likely invest 30 billion rupees($564.92 million) to set up an LNG terminal at Kakinada on India's east coast and would import and supply gas initially to Reliance Power's 2400-MW gas-fired plant in Andhra Pradesh, slated to come onstream in 2012.

India's gas-based power plants are facing uncertainty over fuel supply as gas output from the D6 block operated by Reliance Industries, off India's east coast, has declined, forcing power producers to look for other substitutes.

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