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Six cos keen on Ratnagiri Power's LNG terminal

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Press Trust of India New Delhi

Reliance Industries (RIL), Essar Oil and Indian Oil Corporation (IOC) are among the six firms, which have expressed interest in taking on lease the LNG terminal adjacent to the Dabhol power plant, even as the commissioning of the import facility has been put off by six months to October.

Besides, other companies interested in hiring the five-million-tonne-a-year capacity liquefied natural gas (LNG) import facility on tolling basis include NTPC and GMR Group.

"We will decide on giving the LNG terminal on tolling basis in one or two months...Maybe by July," said A K Ahuja, managing director of Ratnagiri Gas and Power - the company that operates the nation's biggest gas-fired power plant and the adjacent LNG import facility.

 

RGPPL does not need the terminal as the government has already allocated natural gas from RIL's Bay of Bengal KG-D6 fields to fire the 2,150-Mw power plant.

"Since there is no breakwater, only one million tonne capacity will be available for leasing in 2009-10," he said.

RGPPL would earn Rs 140 crore annually in tolling fee, which is likely to be around $0.60 per million British thermal unit of import fuel.

"Our operation cost is around Rs 120 crore, so we will make Rs 20 crore of profit on import of one million tonne of LNG. When import goes up, our profits will also rise as the operations cost will remain around the same," another company official said.

Ahuja said the commissioning of the LNG receipt and regassification terminal has been delayed to October as choppy conditions at sea make it difficult for the ships to dock at the port during the monsoons beginning mid-May to September.

In the absence of a breakwater, port operations are closed and so "we will now try to commission the terminal in early October", he said.

RGPPL currently receives regasified LNG under a 5.8 mmcmd supply agreement with Petronet. However, the company takes only 2.8 mmcmd due to persistent equipment problems at the power plant. The deal with Petronet is set to expire in September after which it will start receiving gas from KG-D6.

Dabhol would be India's third LNG terminal after Petronet LNG's Dahej facility in Gujarat and Royal Dutch Shell Plc's Hazira plant, also in the same state.

The commissioning of the terminal was initially planned for April and then delayed to early May. RGPPL may take help of state-owned Shipping Corporation of India (SCI) to provide port service operations at Ratnagiri in Maharashtra.

Ahuja said RGPPL would execute an agreement to this effect before commissioning the LNG terminal.

RGPPL was set up as a joint venture led by state-run gas utility GAIL and power producer NTPC to operate the 2,150-Mw gas-fired power plant at Dabhol, about 185 km south of Mumbai.

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First Published: May 12 2009 | 6:53 PM IST

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