Dabhol LNG terminal to come up on contract

The construction of a liquefied natural gas (LNG) terminal and power plant for Dabhol in Maharashtra will be taken up only on a contractual basis by Petronet LNG Ltd (PLL) and National Thermal Power Corporation (NTPC).

According to a plan worked out by the Centre, the two companies will take up the jobs on a payment basis prior to its sell-off. Officials said PLL has estimated an expenditure of about $100 million on the construction of a LNG plant and breakwater.

Officials also said the job of shipping LNG may be again given to the Mitsui and Shipping Corporation joint venture which was formed for the purpose when the project was alive.

"However, the chartering rates will have to be renegotiated since they were much higher than what PLL had negotiated with the same consortium for its Dahej terminal." DPC had awarded the charter at $90,000 a voyage to the consortium while PLL is paying only $60,000.

Dispelling the speculation that Gail (India) Ltd has been asked to run the LNG terminal, officials said that its role would be confined to sourcing the fuel. "There is a likelihood of Oman being approached again," said an official.

The plant has been lying shut for three years and the government wants to put it on the block after converting it into a running unit to get a better price.

Simultaneously, the Indian lenders will be settling dues with overseas lenders. The total expenditure for restart of the project is estimated to be Rs 1,800 crore. It is expected that construction work will take at least 18 months.

Project plans

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• Petronet and NTPC to take up Dabhol jobs on payment basis prior to its sell-off
• Petronet LNG has estimated an expenditure of about $100 mn on construction of the plant and the breakwater
• Job of shipping LNG may go to a Mitsui-Shipping Corporation joint venture which was formed for the purpose