AMNS aims to design Captive Port For Hazira Steel Plant

03 May 2023 CW Team

The new captive port at Suvali in Surat will be designed to handle 60 mt of bulk, break bulk cargo, and finished goods, as well as 5 mt of liquefied natural gas (LNG), from 8 berths, three of which can accommodate Capesize vessels with a capacity of 180,000 dead weight tonnes (DWT), and four of which can dock Supramax ships with a capacity of 55,000 DWT.

Documents show that months after purchasing a 25 million tonne (mt) capacity captive port at Hazira from Essar Group to serve its nearby steel mill, ArcelorMittal Nippon Steel India Ltd (AMNS) has begun plans to build a new deep draft captive facility at Suvali in Gujarat's Surat district to handle 65 mt of in-house cargo required by the Hazira plant following expansion.

When the steel mill expands beyond its current capacity of 10 mt annually, the additional captive port will be prepared to meet its needs.

The agreement under which ArcelorMittal Nippon Steel acquired Essar Steel for around Rs42,000 crore in accordance with Indian bankruptcy rules did not include the captive port at Hazira.

The issue over the ownership of the captive port was resolved last year when AMNS paid Essar Group $2.05 billion (about Rs16,500 crores) to acquire the 25 mt captive facility, a 270 MW power plant in Hazira, and a 12 mt captive berth at Paradip Port.

The new captive port will have eight berths and be able to take Capesize boats with a capacity of 180,000 dead weight tonnes (DWT) and Supramax ships with a capacity of 55,000 DWT. It will also be able to handle 60 mt of bulk, break bulk, and finished commodities in addition to 5 mt of liquefied natural gas (LNG).

Along with an 185 hectare cargo storage area, a new captive port will be built on 331 hectares. Limestone, dolomite, iron ore, and finished commodities including flat products, slabs, pipes, and other steel products are among the cargoes that are intended to be handled.

The old captive facility is on the southern side of the steel mill, while the new captive port is set to be built on the northern side. AMNS's decision to establish a new captive port in Suvali coincides with plans announced by Adani Ports and Special Economic Zone Ltd (APSEZ) to invest more than Rs14,000 crores in expanding the capacity of its nearby port from 84 mt to 234 mt.

According to insiders in the port business, the proposed project's proximity to Adani's current Hazira port and its development plan area could hamper its profitability. Concerns have also been raised about how the proposed port may affect the stream and other migratory bird habitats that are ecologically fragile.

According to the steel manufacturer, the proposed port by ANMS and the current Hazira port's navigational channel are both far away from one another.

“Hazira port is operating in the Gulf of Khambhat open area and our proposed port (will be) in the Gulf of Khambhat entry area. Besides, AMNS is completely a captive port for our steel plant, and it will not affect the Hazira port operations,” it told the Expert Appraisal Committee (EAC) attached to the Ministry of Environment, Forest, and Climate Change while applying for environment clearance.

The Gujarat Maritime Board is concerned about AMNS' plan to build a 5 mt LNG terminal at the proposed captive port because Shell Gas B V already operates a 5 mt LNG facility in the existing Hazira port, which has a 10 mt expansion capability.

“We are not sure whether it is commercially viable to set up a new LNG terminal at Hazira. AMNS can tie-up with Shell for their needs,” said a GMB source.

The steel manufacturer modified the intended captive port's layout in accordance with the EAC's directions by reducing the area designated for mangroves, decreasing the total port development area from 364 hectares to 331 hectares, and shortening the south breakwater from 2,700 meters to 2,300 meters.