Algerian LNG to fire Dabhol power plant

The beleaguered $3-billion Ratnagiri power plant, which at present generates expensive electricity using naphtha, is likely to get liquefied natural gas (LNG) from Algeria from mid-2009.

GAIL India Ltd, which owns 50 per cent of the plant, is in talks with an Algerian firm for sourcing long-term LNG to fire the 2,184-Mw power plan. "The Algerian company has indicated the possibility of supplying 1.2 million tonnes per annum LNG for 25 years starting mid-2009," a source said.

An additional 1.2 million tonnes of LNG could also be made available, the source said.

GAIL, which was mandated by the government to meet the LNG requirement of the power plant, is negotiating supply terms and pricing and a term sheet is expected to be signed soon.

Ratnagiri Gas and Power, a GAIL and NTPC Ltd joint venture, restarted block-II on May 1, 2006 using stored naphtha. Block-II can generate 740 Mw (17 million units of electricity per day) but was only generating about 5 million units per day using naphtha as feedstock.

It is yet to begin full commercial sale due to feedstock constraints and supplies power to Maharashtra State Electricity Board (MSEB) at Rs 4.25 per unit.

The source said GAIL had, in May, bought 60,000 tonnes of spot LNG from Sonatrach of Algeria at an ex-ship price of $9.28 per million British thermal unit (mbtu). "Spot LNG prices are generally higher. A long-term contract will see a much lower price," he said.

The 1,444-Mw phase-II of the plant is likely to be completed by year end and Ratnagiri Gas have told MSEB that the plant would begin receiving LNG supplies from 2007.

Petronet LNG Ltd, a company promoted by GAIL, IOC, BPCL and ONGC, has arranged import of 1.2 million tonnes per annum of LNG from Qatar, which will be available from the beginning of 2007. This quantity can be supplied to Ratnagiri Power Plant.

The 740-Mw phase-I was shut down four years ago following a payment dispute. The 2.5 million tonnes-a-year LNG terminal is still only 70 per cent complete and PLL would import LNG from Qatar at its Dahej terminal in Gujarat and then pipe the regassified LNG to Dabhol, he said.