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Rediff.com  » Business » Petronet's LNG supply to Dabhol after pipeline construction

Petronet's LNG supply to Dabhol after pipeline construction

April 16, 2007 18:22 IST

Petronet LNG Ltd will begin supplying liquefied natural gas imported from Qatar, Egypt, Algeria and Oman to the beleaguered Dabhol power plant once a small 15-km stretch of pipeline is completed, a company official said.

"We have tied-up import of 24 spot LNG cargoes for supply to the 2,150 MW Dabhol power plant for one year. The LNG is to be imported at our Dahej terminal in Gujarat and regassified- LNG to be transported to Dabhol through a GAIL pipeline," the official said.

However, LNG supplies to the plant could not begin as the pipeline was not completed by the scheduled March deadline.

The LNG cargoes tied-up at the rate of two shipments per month had to be diverted to power and fertiliser plants in absence of offtake arrangement for Dabhol, he said. Petronet expects the 500-km pipeline to be complete by June.

"A small stretch of 15-km in Gujarat is holding up the entire project as local authorities in the state have sought for a diversion."

The company, he said, will import 13 LNG cargoes this calendar year for supply to Dabhol. LNG is being bought at a 'free on board' price of $7.5-8.5 per million British thermal unit.

Only one out of the three blocks of 740 MW each is operating at Dabhol on naphtha. The second power block, which was expected to come on stream on April 30, is not likely to materialise in view of funding constraint and is now expected by end-May.

The completion of the third block has been postponed to December 15 as against the earlier deadline of November 2007. "The plant will switch to gas once the pipeline is completed," the official said.

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