Govt allocates additional gas for Dabhol unit

The Dabhol plant, owned by Ratnagiri Gas and Power Corporation (RGPPL), may become fully operational from the beginning of the next financial year as the government has allotted additional gas supply for the plant.

The empowered group of minister (EGoM), headed by External Affairs Minister Pranab Mukherjee, has approved additional gas allocation for the plant from the Krishna-Godavari (KG) basin.

This allotment means that Dabhol, which can generate 1,900 MW of electricity, will get additional gas as soon as the dispute between the warring Ambani brothers gets settled. Additional electricity generation is expected to help bridge the demand-supply gap in Maharashtra.

The state requires about 13,500 MW against an availability of 9,000 MW.

The panel has allocated 1.4 million metric standard cubic meter per day (mmcmd) of gas for Dabhol from January next, which will help boost the power generation capacity to 1,550 MW from the present 1,200 MW. From April, Dabhol will get another 1.2 mmcmd which will increase the capacity by an additional 350 MW.

Dabhol may also benefit financially from the KG gas allocation as the fuel is likely to be priced at $4.15 mmBtu compared with $6 mmBtu it pays to Petronet LNG for supplying 5.4 mmcmd of gas.

The plant was expected to be fully operational by mid-2006, but non-availability of gas, frequent breakdowns and dispute with the original equipment supplier General Electric (GE) over maintenance and repairs contract made it impossible to run the plant at its full capacity.

The plant has three units of 670 MW, 740 MW and 740 MW. The first unit started functioning in May 2006 using naphtha, the second in November last year after gas became available.

Gas utility GAIL India and power utility NTPC are the majority shareholders in RGPPL with 28.3 per cent stake each.