India is all set to get its third liquefied natural gas (LNG) import terminal commissioned in November this year at Dabhol in Maharashtra.
The Rs 3,000-crore terminal, accounting for around 25 per cent of the overall cost of the Dabhol project, was initially meant to feed the adjoining power plant. A senior official from Ratnagiri Gas and Power Pvt Ltd (RGPPL), however, added that gas from the terminal would not be used to run the Dabhol power plant and would be supplied entirely to other domestic companies.
RGPPL had initially planned to commission the terminal in March this year. “The LNG terminal will now be commissioned by November-end. There has been some delay due to bad weather conditions leading to excessive silt at the port which requires dredging,” said the official. Like the first two LNG terminals that are located at Dahej and Hazira in Gujarat, the Dabhol LNG terminal will also be on the west coast.
The gas-starved power plant has been allocated 2.7 million standard cubic metres per day (mmscmd) of gas supply from the Reliance Industries’ block in the Krishna-Godavari basin. This supply — an agreement for which was inked by the company in June this year — is likely to begin from October 1.
An earlier proposal of hiving off the Dabhol LNG terminal was turned down by the government last year as the proposal faced opposition from NTPC Ltd and GAIL, which hold 28 per cent equity share each in the Dabhol power project.
The terminal with an LNG regasification capacity of 5 million tonne per annum (mtpa) forms a part of the integrated Dabhol power project owned by RGPPL. The terminal will, however, become fully operational only after completion of the breakwater facilities in 2011.
Construction of the terminal was abandoned in June 2001, when the Dabhol project — formerly owned by US energy major Enron — ran into contractual problems. The government had later asked RGPPL to revive the project and all of its facilities, including the LNG terminal.
Officials at RGPPL informed that the terminal would generate revenue of at least Rs 150 crore annually for the company at the current market price for LNG regassification, even while processing one million tonne — a fifth of its total capacity — of LNG initially. Currently, the market price for LNG regasification is benchmarked between 60 and 70 cents per million British thermal units (mbtu).
“We had invited expressions of interest (EoIs) from companies to decide upon suitable prices for providing the regasification facility through our terminal. Eight companies have submitted their EoIs, including NTPC Ltd, GAIL, Indian Oil Corporation, Reliance Industries Ltd and Reliance Natural Resources Ltd,” said the official, adding that the company would now float the Request for Proposal by October-end. The selected company can bring in its cargo and use the regassification facility on tolling basis.
India has two LNG terminals currently — of about 9 million tonne capacity — operational at Dahej and Hazira in Gujarat. The Dahej terminal set up by Petronet LNG Ltd (PLL) — a joint venture of state energy firms — has a capacity of 6.5 mt, while the Hazira terminal set up by Shell has a capacity of 2.5 mt. In addition, two more LNG terminals are planned to be set up at Kochi and Pipavav.
The LNG terminal would supplement gas supply in the country though demand, estimated at 170 million standard cubic metre a day of gas, is more than the current supply of 140 mscmd.
