GAIL in talks with Algeria, Nigeria to import 5mt LNG

GAIL (India) Ltd is in talks with Algeria and Nigeria for sourcing five million tonnes of liquefied natural gas (LNG) on a long-term basis from 2009.

"The talks are at an advance stage for getting LNG on the long term basis," a senior GAIL official said. He said the company is looking to source equal amounts of 2.5 million tonnes from both countries. "In Algeria, the company is negotiating with Sonatrach, while in Nigeria, it is talking to a Government firm," he said.

According to sources, GAIL is scouting LNG suppliers from at least six countries. Earlier this year, GAIL had contracted a spot cargo of 135,000 cubic meter of LNG from Algeria at an ex-shipment price of 9.28 dollar per million British thermal unit (mBtu).

About the jinxed Dabhol power plant, he said the Ratnagiri LNG terminal would be ready by mid-2007 and 1.2 million tonnes of LNG for the Dhabol power plant would made available from the Dahej terminal February next year.

GAIL, which holds 28 per cent stakes in the Ratnagiri Power and Gas Pvt Ltd (RGPPL), has been trying to contract long-term LNG for the Dabhol project, but without much success. Recently, Reliance Industries Ltd expressed interest to take over the revived Dabhol project and the LNG regasification facility.

RGPPL, which has an equity participation of NTPC, GAIL, IDBI-led lenders and the unbundled Maharashtra State Electricity Board, has been making all out efforts to complete the project. he company is trying to meet the deadline of March 2007 to run the project on gas/LNG. At present, the plant is running on imported Naptha feedstock.

Petroleum Minister Murli Deora at the recent meeting of the empowered group of ministers had said that the supply of gas/LNG for the project will be ensured by March next year.

The 2,150 MW Dabhol power plant was revived in May this year after five years of closure. Although a part of the plant was run on naphtha in May to supply power to Maharashtra, the project is yet to tie up uninterrupted supply of gas to run the plant. Dabhol needs 2.1 million btu of LNG per year.

As a short-term measure, Petronet LNG Ltd has confirmed tie-up of 1.2 million tonne per annum LNG from Qatar from March 2007 to June 2009. Petronet LNG is yet to formalise the price issue with Qatar.

Source: The Pioneer, New Delhi
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