The beleagured $3 billion dollar Dabhol power plant, which is currently generating expensive electricity using naphtha, is likely to get liquefied natural gas (LNG) from Algeria from mid-2009.GAIL India, the 50% owner of the Dabhol power plant, is in talks with an Algerian firm for sourcing long-term LNG to fire the 2,184 MW power plant, an industry source said."The Algerian company has indicated the possibility of supplying of 1.2 million tonnes per annum LNG for 25 years starting from mid-2009," he added.An additional 1.2 million tonne LNG could also be made available, the source said.GAIL, which was mandated by the central government to meet the LNG requirement of the plant, is currently negotiating supply terms and pricing and a term sheet was expected to be signed soon.Ratnagiri Gas and Power, a joint venture of GAIL and National Thermal Power Corp (NTPC), 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 begun full commercial sale due to feedstock constraints and supplies power to Maharashtra State Electricty Board (MSEB) at Rs 4.25 per unit.The source said GAIL had, in May, bought 60,000 tonne 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.
