Petronet may boost LNG imports from Qatar for Dabhol

Petronet LNG, India's largest liquefied natural gas importer, may sign a contract to buy additional LNG from Qatar to supply India's biggest gas-fired power plant in Dabhol, a company official said.

Petronet plans to import 1.25 million tonne of LNG from Qatar's Ras Laffan Liquefied Natural Gas, in addition to its existing multi-year contract for 7.5 million tonne annually, Petronet Managing Director Prosad Dasgupta said today.

"We will sign the contract anytime now,'' Dasgupta said in a telephone interview. "The LNG will be used to supply Dabhol.'' Dasgupta declined to reveal a price for the gas.

The gas importer plans to start supplying the fuel to two generators in Dabhol starting June 21 at a delivered price of $5.83 per million British thermal units after GAIL, India's largest gas distributor, completes a gas pipeline. GAIL India and state-run NTPC, the country's biggest power producer, together own a controlling stake in Dabhol.

Petronet's stock has almost tripled since an initial public offering in 2004, helped by increased sales. The shares rose 0.5 per cent to Rs 55.7 on the Bombay Stock Exchange today.

The company plans to supply as much as 6 million cubic meters of gas a day through the $414 million pipeline that connects an import terminal in Dahej to the 2,184 mw plant in Dabhol.

Dabhol, a project started by Enron Corp in 1996, has capacity to produce enough power for more than 2 million homes. The plant has never worked at more than one-third of capacity because of Enron's collapse, disputes over power prices and a lack of gas for the furnaces. It now operates at 15 per cent, burning the costlier oil product naphtha.