Dahej-Panvel gas line stage-I on stream commissioned

The Gas Authority of India Ltd (GAIL) has finally managed to pump gas into part of its much talked-about Dahej-Uran-Panvel-Dabhol gas pipeline (DUPL) which will take natural gas further to Ratnagiri power project previously known as Dabhol power project. The first stretch of the Dahej - Panvel - Dabhol pipeline from Dahej to Surat of 100 km length was commissioned at Dahej on Monday.

The Maharashtra and the Gujarat state government were at loggerheads over a small patch of DUPL pipeline passing through south Gujarat. The deck has now been cleared for this 12-km long stretch and the disputes have been put to rest, said Murli Deora, Union Minister for Petroleum and Natural Gas said during the 'gas-in' ceremony at Dahej terminal of Petronet LNG.

Murli Deora, at the gas-in ceremony of the first 100-km stretch of Dahej-Uran gas pipeline said, "The work on the remaining approximately 15 km to 20 km stretch would soon be completed and the pipeline would be commissioned in a month or so." Commenting on the pipeline, GAIL Chaiman U B Chowbay said that in most likelihood DUPL will flow gas to Ratnagiri by the end of June '07.

The Gujarat government, which buckled under pressure from centre, however, has now claimed that the new gas price pooling system being implemented by the gas supply companies would cost the state an additional burden of Rs 750 crore.

Saurabh Patel, the Gujarat's energy minister told Business Standard that the Centre is extending support to Ratnagiri power project and to Maharashtra state government at the cost of Gujarat and its industry.

He said that gas price pooling would help Ratnagiri Power to cut cost of its LNG imported from the spot market at a higher price but it will in turn increase the cost of gas supplied to customers in Gujarat at a contracted price.

The Gujarat government claims that the pooling of gas price, which would take an average price of imported LNG and the one being supplied under the long-term supply contract, would drastically reduce the difference between naphtha and natural gas.

The Gujarat-based customers who have tied up for imported LNG at a price of around $3.83 per Million British Thermal Units (MMBTU), which would now become around $5.83 per MMBTU. However, for Ratnagiri Power, the gas price pooling mechanism would reduce the cost of its spot LNG from around $7.5 per MMBTU to $5.6 per MMBTU.

DUPL line with 30" diameter and 576 km length has an estimated investment of Rs 3,200 crore. The pipeline has a design capacity of 12 Million Standard Cubic Meter Per Day (MMSCMD) and will carry R-LNG from Petronet LNG Ltd's LNG terminal at Dahej to Dabhol.

The pipeline on completion, will supply natural gas to the Dabhol Power plant of Ratnagiri Gas and Power Private Limited (RGPPL), and thus help in reviving the power plant.