Petronet to cash in on gas demand, fast-track Dahej expansion

The country biggest gas importer, Petronet LNG, plans to reduce the time for the capacity expansion of the Dahej terminal by more than a year to cash in on the huge domestic gas shortage. The company is working on a strategy to expand the terminal's capacity by 50 per cent to 15 million tonne by first introducing the regasifcation and marine facilities. This would enhance the capacity in two years, even without the storage tank.

In the previous quarter, the company's board had approved the expansion plan, which entails an investment of Rs 3,000 crore. Managing director and chief executive officer A K Balyan said, "There are three components for expansion. First is the marine facility expansion, with a jetty that is already underway. The second facility is storage tanks, and the third is a regasification unit. We want to introduce the regasification unit first so that we don't have to wait for storage tanks to raise the capacity….If we can prioritise things in the expansion plan at Dahej, we can get some advantage."

Storage tanks take about 40 months to come up. This is the longest among the three facilities, while the regasification expansion can be carried out in 24 months. The marine facility, along with the jetty, is critical to bringing in more ships. This would be ready by mid-2013.

Balyan said even before this expansion plan came up, the Dahej terminal operated at 110 per cent capacity. However, Balyan said, "Operating above the nameplate capacity is not recommended in the long run."

With this capacity, Dahej would be among the biggest LNG terminals globally. The UK has a terminal with a capacity close of to 17 million tonnes, Balyan said.

The country's gas availability has been declining for a while now, with a consistent fall in the country's largest gas-producing field KG-D6, which is operated by Reliance Industries and BP. The demand, however, has been rising sharply due to a surge in power and fertiliser demand.

This has prompted companies like Petronet to expand capacities at existing terminals and add new ones. The country's LNG regasification capacity is expected to rise from 13 million tonnes to 30 million tonne by 2015.