Petronet to up Dahej capacity

Petronet LNG has decided to increase its rated capacity to 12.5 million tonne from present 5 million tonne per annum. The company will set up two additional tanks and two gasifier units at a cost of Rs 1,000 crore (Rs 10 billion) with a capacity of 2.5 million tonne each at its Dahej LNG receiving terminal.

P Dasgupta, CMD, Petronet LNG, told Business Standard that the approval from the Union ministry of forest and environment is awaited to set up this facility at the Dahej project site.

The approvals for the project from the Gujarat Pollution Control Board and Gujarat State Department of Forest and Environment have already come. At present, the company uses one of its two tanks at the Dahej port as spare capacity to store LNG.

At present, the company has two re-gasifier units for two tanks in Dahej.

Petronet LNG will also sign its concessional agreement with the Gujarat government on November 4. The agreement will formalise 20 per cent LNG supply to Gujarat State Petroleum Corporation Ltd and allow Petronet LNG to mortgage its assets.

The company had signed the letter of intent way back in 1998, but the concessional agreement, which formalises the build, own, operate and transfer arrangement between the Gujarat government and Petronet has not been signed so far.

The agreement will also offer company some benefits in state taxes for one year from the date of the start of its operations.

Dasgupta said since the company has already completed its one-year of operations, benefits would come with retrospective effect.

Once concessional agreement is signed, Petronet LNG's BOOT agreement will come into affect, for 25 years, starting from February 2004, the date of starting the project.

As part of concessional agreement, GSPC, which currently receives 20 per cent of LNG from Petronet LNG, will formalise its supply arrangement with Petronet LNG. GSPC will then receive 1 million tonne of LNG as part of the agreement.