Dabhol power to cost Rs 3 per unit from April

Maharashtra on Monday said the LNG pipeline for supplying gas to the beleaguered Ratnagiri (erstwhile Dabhol) power plant would be completed by April this year after which the cost of power would work out to be Rs 3 per unit.

The state at present is buying power at the rate of Rs 5.10 per unit from the plant, now acquired by Ratnagiri Gas and Power Ltd (RGPPL).

"Once the pipeline is complete, the cost of power would go down to Rs 3 per unit," Maharashtra's principal secretary (energy) Jayant Kawle said.

Petronet LNG (PLL) has been given the responsibility of procuring 1.5 million tonnes per annum of LNG on spot basis for 'short term' supplies. Up to September 2009, LNG will be re-gasified by PLL at its Dahej plant in Gujarat and gas would be transported through the pipeline connecting Ratnagiri to Dahej.

Gail India is building the 575 km pipeline connecting LNG import terminals owned by Shell and Petronet on India's west coast to the plant at Dabhol.

The pipeline has been delayed for more than two years because of a legal dispute between Gail and a contractor and farmers' objections to the use of arable land.

"The pipeline is on schedule and should be completed by April or May or at the latest by June," Kawle said. The 2,184 MW Dabhol power plant has never worked at more than one-third of capacity because of Enron's collapse, disputes over power price and lack of gas for the furnaces.

Generation was resumed at the plant last year, when it switched to liquefied natural gas from naphtha for fuel, and now produces 1,400 MW. "We have enough gas for generating 1,400 MW of power till the pipeline comes up," Kawle said.

The state currently faces a total power shortage of 4,500 MW a day.

Asked about the Sindhudurg Ultra Mega Power Project, he said the government was thinking of continuing with the environment clearances.

"Local minister Narayan Rane has suggested that we go ahead with the environment clearance assessment and if it turns out that there will be problems to the mango cultivation then we will shift to some other site," Kawle said.

Asked whether the government had identified an alternative site for Ultra Mega Power Projects, he said: "We always had alternative sites. However, we are yet to finalise that."