An Indian subsidiary of Royal Dutch/Shell said yesterday preliminary work for a liquefied natural gas (LNG) import terminal in India had begun and work for the main facility would start in November.

The 19.50-billion-rupee ($414-million) project in western India will handle LNG imports up to five million tonnes a year, and the company could double its capacity if there is enough demand.

"Hazira Port Pvt Ltd, a 100-per cent Royal Dutch/Shell Group company, has let (awarded) a contract for the building of access roads, pipeline crossings and other civil works for the Hazira port and LNG terminal," a company statement said.

It said the contract was awarded to Essar Projects Ltd, which began work in July. The statement quoted Hazira Port Pvt Ltd director Martin Foley as saying gas sales from the terminal would begin in the first quarter of 2004.

The Hazira port and LNG terminal were awarded to a consortium led by Shell Gas after an international competitive bid in November 1999, the statement said.

In June this year, India's Foreign Investment Promotion Board approved its proposal to set up a a separate company for importing LNG, sourcing domestic natural gas and transporting and selling regasified LNG/domestic natural gas, it said.