Oil ministry told to find LNG for Dabhol plant

Getting the beleaguered Dabhol Power Project running continues to be top priority for the government. Even though the power block at Dabhol Power Project, rechristened Ratnagiri Gas and Power, will fully operational by March 2007, LNG for the power project will continue to be a problem. The petroleum ministry has been asked to expeditiously work out a feasible plan to procure LNG.

Gail India, which has been entrusted with sourcing longterm supplies of fuel for the project, has approached suppliers in Australia, Malaysia, Indonesia, Abu Dhabi, Oman, Qatar, Egypt and Algeria. However, no commitments have been forthcoming. The power block is expected to be fully operational in March 2007. The completion will come at a cost of Rs 1,957 crore, which is lower than NTPC and GAIL?s estimate of Rs 2,415 crore.

The LNG facility will be complete by March 2007 as well, however only 20% of the facility can be utilised as breakwaters will be only by 2009. Studies show that breakwaters are essential to the project to improve utilisation of the facility. Petronet LNG has got a confirmation of short-term supply of LNG from Rasgas for 1.2 MMTPA for the period between March 2007 and June 2009, at an indicative price of Henry Hub?s 12 month average which is estimated price of $8 per mmbtu. It is the long-term supply of LNG from 2009 that continues to be a problem.

But it seems unlikely that the government is ready to wash its hands off the project ? the restructing of the Dabhol Power Project is one of the UPA government?s first decisions.

Source: The Economic Times, New Delhi
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