Maharashtra to invest in LNG terminal at Dabhol

The Maharashtra government, which doesn't want the LNG terminal at the Dabhol plant of Ratnagiri Gas & Power to be hived off, has offered to invest in reviving the project, in proportion of its stake in the RGPPL. The state government's proposal has added a new twist to the ongoing saga of the LNG terminal at Dabhol.

Speaking to Business Standard, a senior official from the state government's energy ministry said, "We have proposed to invest around Rs 250 crore or in proportion to our stake in the RGPPL" The Maharashtra government owns 15 per cent in the RGPPL."

If the promoters of RGPPL, GAIL and NTPC decide to invest in the project, then without hiving off the LNG terminal, it can be easily revived, claimed sources.

The 5.5 million tonnes per annum (mmtpa) is expected to complete by 2008 without break water facility and with break water facility in 2010. The NTPC and GAIL India, which holds 28.5 per cent stake in the project, had separately shown interest in reviving LNG terminal project.

However, it was reliably learnt both GAIL and NTPC have told the Empowered Group of Ministers (EGoM), project would be unviable if the cost of revival overruns Rs 2,850 crore.

However, petroleum ministry is not keen on idea of hiving-off the LNG terminal as they feel running a LNG terminal as a stand-alone entity is not feasible and considering the cost overruns, the prices quoted by prospective bidders will not be too attractive.

The EGoM is expected to take the decision on future of LNG terminal in its meeting which is scheduled for next week. Meanwhile, Maharashtra's energy minister Dilip Walse-Patil confirmed, state government has decided to invest up to Rs 250 crore in the LNG terminal project.