GAIL in talks with Algeria, Nigeria for LNG supplies

The state-owned gas transmission and marketing company GAIL (India) Ltd is in discussions with Algeria and Nigeria for five million tonnes (mt) long-term liquefied natural gas (LNG) supply deals for its Ratnagiri LNG terminal, which is to be commissioned by mid-2007.

A senior GAIL official said "the company is in talks with both the countries for long-term LNG deals of 2.5 mt each, with supplies beginning from 2009".

Stating that the talks were at an advance stage, the official said "in Algeria, the company is negotiating with Sonatrach, while in Nigeria, it is talking to a Government firm."

In the interim period, till long-term supplies become available, GAIL will be using re-gasified LNG supplied by Petronet LNG Ltd (PLL) from Dahej terminal in Gujarat to fuel the power plant of its joint venture Ratnagir Gas and Power Pvt Ltd, formerly Dabhol Power Company. PLL is expected to source 1.2 mt of LNG from Qatar.

New pipeline

The re-gasified LNG from Dahej is to be transported to Ratnagiri terminal via a new Dahej-Uran-Ratnagiri pipeline under construction by GAIL.

The pipeline is scheduled to be made operational by March 2007, when the gas will help to revive the 2,140-MW power plant, he said. The power plant has been shut down for last several years except for two months this year (May and June), when one of the three units was made operational using holding stock of naphtha fuel.

"The re-gasified LNG to be supplied by Petronet will help us generate around 1,000 MW of power," he said.

Enthused by the successful trade of LNG bought in spot market and sold in domestic market after re-gasification at Dahej, GAIL is now looking at using its own facility at Ratnagiri for merchant sales of around 2.9 mt of spot cargo after re-gasification.

Source: Business Line, New Delhi
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