India is set to get its third liquefied natural gas import terminal. The Rs 2,700-crore (Rs 27-billion) terminal, at Dabhol in Maharashtra, was initially meant to feed the adjoining power plant but would now supply to other domestic companies.
"The terminal is expected to be commissioned in the third week of March," said a senior official of Ratnagiri Gas and Power Private Ltd -- earlier called Dabhol Power Company -- which owns the terminal as well as the power plant. He said the gas from the terminal would not be used to run the power plant, which had been allocated gas from the Reliance Industries' [Get Quote] block in the Krishna-Godavari basin.
This supply is likely to start in the next few weeks. A proposal to hive off the terminal was turned down by the government last year after it was opposed by NTPC Ltd [Get Quote] and Gail, which hold 28 per cent each in the project.
The terminal has an LNG regassification capacity of five million tonnes per annum. It will, however, be fully operational only after the completion of the breakwater facilities in 2011.
The construction was abandoned in June 2001, when the Dabhol project, formerly owned by US energy major Enron, ran into contractual problems. The government later asked RGPPL to revive the project.
RGPPL officials said the terminal would help the firm earn about Rs 150 crore (Rs 1.5 billion) annually. "We will invite expression of interests from companies to decide the price for providing the regassification facility," said the official.
Currently, the market price for LNG regassification is 60-70 cents per million British thermal units (mBtu).
At present, India has two LNG terminals, both in Gujarat. The Dahej terminal, set upby Petronet LNG Ltd [Get Quote], a joint venture of state energy firms, has a capacity of over five mbtu, while the Hazira terminal, set up by Shell, has a capacity of about 2.5 mbtu. One LNG terminal each is planned in Kochi and Pipavav.
LNG terminals supplement gas supply in the country, though the demand, estimated at 170 million standard cubic meter per day (mscmd), is more than double the supply.
Experts feel the third LNG terminal will lead to huge benefits to fertiliser and petrochemical firms. "There is demand for gas. The facility will benefit fertiliser and petrochemical firms as their capacity to pay for LNG is higher," said Arvind Mahajan, executive director, KPMG Advisory Services.
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