Dabhol plant to produce electricity at Rs 2.83/unit

The beleaguered Dabhol power plant in Maharashtra will produce electricity at Rs 2.83 per unit from June this year after the government decided to use Petronet LNG Ltd's cheaper imported LNG to subsidise the plant's costlier fuel.

The 1.5 million tonne of LNG being sourced to meet Dabhol plant's short-term requirement (till September 2009) cost 10 to 10.5 dollars per million British thermal unit(delivered), resulting in generation cost of Rs 4.40 per unit. ?Since this is too high a price, petroleum ministry suggested pooling of price of short-term LNG being imported for Dabhol with Petronet's existing import of 5 million tonne of LNG from Qatar,? an official said. 5 million tonne per annum of LNG being sourced by Petronet LNG from Qatar is sold to end consumers at a$4.6 per mBtu.

?After pooling the two prices, the delivered cost of gasto Dabhol would be $5.73 per mBtu (without customs duty on imported LNG) and $5.84 per mBtu (with customs duty). The variable cost of electricity generation will be Rs1.83 per unit and Rs 1.87 per unit respectively,? the official said.

Source: The Financial Express, New Delhi, January 30, 2007
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