Petronet will open bids for LNG terminal on April 30

Petronet LNG Ltd (PLL) will open the bids for the engineering, procurement and construction (EPC) contract for setting up the Rs 2,700-crore LNG terminal here with an
initial capacity of 2.5 million tonnes per annum on April 30.

Speaking to Business Line on Friday, the PLL Chairman and Managing Director, Mr P. Dasgupta, said the pre-bid conference was over and three companies viz, a
Consortium of IHI (Japan), Technigas and Sofra Gas both from France were in the fray. After evaluating the bids work would be awarded before June 30, he said.

On sourcing of LNG, he said, "we have almost completed the SPA agreement with the Australian consortium Gorgan". The last part of the agreement would be completed by third week of April when they come to New Delhi, he said.

LNG Supply

Since the supply of LNG by Gorgan would start only by 2012, PLL is currently negotiating with Ras Gas, Qatar and an Algerian firm to ensure supply for the Kochi terminal
scheduled for commissioning by mid-2010. The Qatari company, which is supplying 7.5 mtpa to Dahej, has agreed to supply 1.5 mtpa and a similar volume would be
available from Algeria.

Under the contracts, the supplier would unload the LNG at Dahej or here. The Kochi terminal, Mr Dasgupta said, would thus have two suppliers. By the time the Australian
consortium would begin the supply, the Kochi terminal would have its capacity expanded to 5 mtpa, he said. Problems related to environmental issues have been
responsible for the delay in the supply from Gorgan, he pointed out.

Contract Prices

He said that all the contract prices would be averaged and there would be a uniform supply price. Currently, the price is $5.83 per mmbtu, he said. It is going to be the first terminal to be hosted by a major port in the country and hence the Cochin Port Trust (CPT) will have to obtain the approval of the Shipping Ministry for the tariffs to be charged towards pilotage, wharfage and other support services. The annual revenue from these sources for the CPT would be substantial, he said. At Dahej, it comes to around Rs 50 crore per annum.

Boundary Wall

Meanwhile, the construction of boundary wall around the terminal site at the Puthyvypeen island near here has come to a standstill for about a month now following disputes
by various labour unions on allocation of work. "If this is the situation at the boundary wall construction then what would happen when the work on the mega project involving Rs 2,700 crore begins some time in July 2007", he asked.

Mr Dasgupta said he would discuss these issues with the State Industries Minister during the next review meeting on April 9.

Source: Business Line, March 31, 2007
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