Dabhol may get LNG supply soon

The Dabhol power project is likely to move a step closer to securing the much-required gas for electricity generation.

GAIL India, one of the partners in the plant's promoter company, Ratnagiri Gas and Power, is likely to complete two critical pipelines for the purpose "" the Dahej-Uran and the Dabhol-Panvel pipeline "" by March 2007.

"The infrastructure will be in place by March 2007. Subject to availability of gas at Petronet LNG's Dahej terminal, Dabhol would be set for using LNG as feedstock," a senior GAIL official said.

The Dabhol plant uses naphtha as feedstock for generating electricity, an interim arrangement "allowed" by the electricity regulator only until March 2007.

The Dahej-Uran pipeline will transport regassified LNG from Petronet LNG's Dahej plant to Dabhol. GAIL is in talks with Algerian and Nigerian companies for import of LNG for Dabhol.

Qatar's Rasgas has also committed to supply 1.2 million tonnes per annum of LNG. Petronet LNG - which has been contracted by Ratnagiri Gas will import the LNG at its Dahej terminal and supply it to Dabhol through the Dahej-Uran pipeline.

Electricity from Ratnagiri is sold to the Maharashtra State Electricity Distribution Co at Rs 5.01 per kWh. The price would be reviewed in January next year. Supply of LNG as feedstock will reduce the cost of electricity by a significant amount.

The two pipelines are part of GAIL's plans to develop a national gas grid. The company has lined up investments worth Rs 18,000-20,000 crore for the project. GAIL is currently implementing four pipelines under the national gas grid.

The Vijaipur-Kota natural gas pipeline for supply in the Rajasthan region and the Jagoti-Pithampur pipeline for supply of natural gas in Madhya Pradesh are the other two pipelines besides the Dahej-Uran and Dabhol-Panvel pipelines.

The company is also scouting for tie-ups for gas supplies for other pipeline networks like the Jagdishpur-Haldia pipeline, the proposed Myanmar-Indian pipeline, the Kochi-Kayamkulam pipeline and the Dadri-Nangal pipeline.

Meanwhile, with the gas market moving towards maturity, GAIL has started maintaining separate accounts for its gas transmission and marketing businesses.

The Petroleum and Natural Gas Regulator, once it is in place, is expected to lay down the guidelines for the bifurcation of the two businesses.

GAIL currently operates over 5,800 km of pipeline network in the country, that has the capacity to transport around 130 mmscmd (million metric standard cubic metres per day) of natural gas.

It is also pursuing plans to build a national gas grid under which gas available from various sources like indigenous gas fields, imported RLNG from Petronet LNG Dahej, PLL Kochi and Dabhol RLNG terminal, and gas from the proposed transnational pipelines from Myanmar and Iran can be transported to various centres in the country.