Petronet to bid for Dabhol's LNG terminal

Country?s largest liquefied natural gas importer Petronet LNG has expressed interest in taking up Dabhol?s five-million tonne LNG import terminal. ?We are interested in the LNG terminal and will bid for it once the government decides to sell it,? Petronet LNG chairman and managing director P Dasgupta said.

The government is considering hiving off the LNG (liquefied natural gas) import terminal of the Dabhol power project as part of plans to check cost over-runs of switching on the generators. Petronet LNG, a company promoted by state-owned oil companies, has emerged as the favoured entity for taking over the terminal, followed by gas utility Gail. Dasgupta said when offered, the company will carry out due diligence before taking a decision.

He said the due diligence will be done by Petronet LNG itself as the company had enough competence in LNG projects.

Petroleum secretary MS Srinivasan on Friday said the government had chosen Petronet LNG for the project as it was a specialist in LNG. Srinivasan said the government had asked ICICI to do a valuation of the project and details will be finalised by Tuesday.

The Dabhol complex is now with Ratnagiri Gas and Power, a special purpose vehicle floated by Gail and state-owned generation utility. The SPV had estimated an outgo of Rs 710 crore for completing 15% work on the LNG terminal left incomplete by the original promoter, now defunct US major Enron. It is now estimated that the work will need an additional Rs 1,000 crore. Together with transfer cost of Rs 1,790 crore, the total cost of the LNG part of Dabhol is likely to cost Rs 3,500 crore.

Industry sources say at this kind of cost, a new 7.5 million tonnes per annum LNG terminal can be built. Dasgupta said other than Petronet LNG, Gail, British Gas and some FIIs may also be interested in the project.

Talking about the expansion programme of Petronet?s Dahej LNG terminal, he said the project was in schedule and construction had started. Petronet LNG is increasing capacity of Dahej LNG terminal from the 5 mtpa to 12.5 mtpa.

Source: The Economic Times, New Delhi, August 28, 2006
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