India’s third liquefied natural gas (LNG) terminal, being built at Dabhol in Maharashtra, would start operating early next year as difficulties in dredging silt at the Ratnagiri port have further pushed its commissioning schedule.
The terminal was expected to be commissioned by the end of this month, followed by the start of its operations in December.
“Now, we will be able to commission the terminal only in January. It would start operating thereafter. Bad weather conditions had led to excessive silt at the port that requires to be removed. We have not awarded the dredging activity so far. A decision on this will be taken at our next board meeting,” said a senior official from Ratnagiri Gas and Power Pvt Ltd (RGPPL).
RGPPL had initially planned to commission the terminal in March this year. Like the first two LNG terminals located at Dahej and Hazira in Gujarat, the Dabhol LNG terminal will also be located on the west coast.
The terminal, with an LNG regasification capacity of 5 million tonnes per annum (mtpa), forms a part of the integrated Dabhol power project owned by RGPPL. The terminal will, however, become fully operational only after completion of the breakwater facilities in 2011. A breakwater facility is a structure erected in the sea to protect the ship.
The Rs 3,000-crore terminal, accounting for around a fourth of the overall cost of the Dabhol project, was initially meant to feed the adjoining power plant. Now, however, RGPPL has drawn plans to offer gas from the terminal on a tolling basis, rather than using it to run the Dabhol power plant.
The official informed that the terminal would generate a revenue of at least Rs 150 crore annually for the company at the current market price for LNG regasification, even while processing one million tonnes — a fifth of its total capacity — of LNG initially.
He also added that the terminal’s capacity utilisation could be ramped up to a half depending upon the shipping efficiency. Currently, the market price for LNG regasification is benchmarked between 60 and 70 cents per million British thermal units (mbtu).
The company had earlier invited expressions of interest (EoIs) from companies to decide upon a suitable price for providing the regasification facility. Eight companies had submitted their EoIs, including NTPC Ltd, GAIL, Indian Oil Corporation, Reliance Industries Ltd and Reliance Natural Resources Ltd.
The delays expected in commissioning and operationalising the terminal have now forced the company to further push the schedule for floating requests for proposal (RFPs). “We plan to issue the RFPs next month now,” the official said. The selected company can bring in its cargo and use the regasification facility.
