Gas for Dabhol plant days away

The 386-km pipeline from Dahej to the power plant became operational on Monday.

Gas is just days away from the Dabhol power plant with the first gas having been run through the Dahej-Uran pipeline on Monday.

This 386-km pipeline covers two-thirds of the distance to Dabhol. An internal message was sent to all GAIL employees on Monday announcing the gas-in of the around Rs 2,000 crore pipeline.

The balance 187-km pipeline connecting Uran-Panvel to Dabhol "is also ready and the gas-in will take place within a couple of days," said S K Bajpai, GAIL's projects director.

The pipeline from Dahej to Dabhol has been built at a cost of around Rs 3,200 crore.

A formal ceremony for commissioning the entire pipeline from Dahej to Dabhol is scheduled to be held at the end of this month.

The pipeline will carry regassified LNG from Petronet LNG's terminal at Dahej to the power plant at Dabhol. Petronet LNG is mandated to supply gas to the plant till September 2009, after which GAIL, one of the promoters of Ratnagiri Gas and Power, the company implementing the power project, will source LNG, which will be regassified at the under-construction terminal at Dabhol.

The gas pipeline will revive the Dabhol project, one unit of which is currently generating electricity using naphtha as feedstock.

The empowered group of ministers (EGoM), led by External Affairs Minister Pranab Mukherjee, was informed at its last meeting on June 7 that the pipeline would be completed by June 23. The EGoM had then wanted to visit the power plant at Dabhol, in time to receive the first gas through the pipeline, an official said.

The 2,184-Mw power plant is currently producing 750 Mw power using naphtha as feedstock. The power, which is bought solely by Maharashtra State Electricity Distribution Company, costs Rs 5.10 per kwh as naphtha is an expensive fuel.

"The price of the gas to Dabhol will be a pooled price of imported LNG and price of long-term gas contracts. The price is likely to be around $4.8 per million British thermal unit (mBtu)," a GAIL official said.

Petronet LNG is currently buying LNG from the spot market for the Dabhol project at around $7.5 per mBtu.

The pooled price, however, is a sticky issue with the Gujarat government as the cost of gas in the state would increase to around $5.83 per mBtu from around $3.83 per mBtu currently.