Dabhol liquefied natural gas plant to be spun off

The 5 million liquefied natural gas (LNG) terminal at Dabhol in Maharashtra will be separated from the power project. The Union government plans to appoint ICICI for valuation of the LNG terminal.

The ministry of petroleum and natural wants to hand over the terminal to Petronet LNG Ltd (PLL), a joint venture promoted by public sector oil companies for bringing in natural gas.

?PLL is the only LNG specialist in the country at present. It is a better position to tie up natural gas,? said a senior official. Petroleum secretary M S Srinivasan would be holding a meeting with ICICI Bank next week on the issue.

The hiving off of the terminal is considered to be comforting for the lenders to the project since natural gas price has shot up immensely. The project has about Rs 10,200 crore debt liability and through the disposal of the LNG asset the liability is expected to be reduced.

The government had last year formed Ratnagiri Gas & Power Pvt Ltd (RGPPL) to restart the Dabhol power project that was abandoned by the erstwhile Enron. GAIL and NTPC Ltd hold 28.33% each in RGPPL.

PLL?s role in the project will be confined to starting and operating the terminal and contracting gas supplies for the power plant. LNG terminal was originally scheduled for completion in 2007 but has now been be pushed to 2009.

Besides, the government is yet to tie up for natural gas though the Union government has claimed that natural gas would be available by early next year.

Source: Daily News & Analysis, New Delhi, August 25, 2006
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