Petronet may seek board nod for power plant at Dahej

Petronet LNG Ltd may seek board approval for setting up a 1500-MW (2X 750 MW) gas-based power plant in October. The plant is proposed to be set up behind its existing re-gasification facility at Dahej in Gujarat and would require an investment of approximately Rs 6,000 crore.

Petronet is looking for a strategic partner for ensuring long-term LNG supply as part of its expansion and diversification plan. The proposed power plant would use approximately 1.5 million tonne of LNG as feedstock.

?We have already appointed an international consultant to conduct a pre-feasibility study on the synergic diversification to power generation. The report will be available in September. We are planning to approach the board for its initial approval in October,? Mr P. Dasgupta, Managing Director and CEO of Petronet, told Business Line on Sunday.

Elaborating on the proposal, he said that the project would be taken up on Petronet?s balance sheet as a captive power plant. This would enable the company to avail itself of the fiscal concessions. Setting up the backyard is also necessary for optimal usage of available resources.

?For example, at out our Dahej plant we produce 100 kl of water everyday from moisture. Accordingly, we need not source additional water for the power plant.?

Strategic partner

Meanwhile, the company sets a target of June 2008 for firming up long-term LNG supply deal with a strategic partner. The latter may be offered 10 per cent stake through $100 million zero coupon foreign currency convertible bonds (FCCBs).

While negotiations with Union Fenosa had fallen through as the Spanish company could not ensure long-term supplies, Petronet is now holding negotiations with consortia creating approximately 150 million tonne liquefaction capacities in Australia, Algeria and Nigeria.

?It is imperative that we have to look forward to the countries where fresh capacities are coming up in the foreseeable future,? Mr Dasgupta said. ?We not looking forward to picking up stake in any liquefaction facility.?

Dahej Terminal Expansion

Petronet has set July-December, 2008 deadline for doubing the capacity of Dahej terminal to 12.5 million tonne. ?Of the total we have already secured supplies of approximately 9 million tonne (including the 1.5 million tonne supply made to Ratnagiri power),? Mr Dasgupta said.

Source: Business Line, Kolkata, 12 September, 2007
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