PLL unable to supply 1 mmtpa LNG for Dabhol project  
1-Jan-1970

The Ratnagiri Gas & Power Pvt Ltd?s (RGPPL) efforts to source liquefied natural gas (LNG) for the Dabhol project from Petronet LNG Ltd (PLL) has failed to yield positive results. PLL has expressed its inability to provide 1 million tonne per annum (mmtpa) LNG for the functioning of the revived Dabhol project.

The Dabhol project is currently closed up to mid-September due to the non-availability of naphtha and also because of the inability of Maharashtra State Electricity Distribution Company to buy costly power.

GAIL India has been holding talks with gas suppliers from Qatar, Oman, Australia, Algeria and Myanmar for the supply of LNG to Dabhol project. But it is yet to clinch a deal for the same. The project will need 2.1 mmtpa LNG for the total generation capacity of 2,184 mw. RGPPL sources told FE that PLL had indicated sourcing only 1.2 mmt LNG for the short-term period to RGPPL.

However, supply of another 1 mmtpa will not be possible as PLL?s Dahej Terminal has a nameplate capacity of 5 mmt, though its design capacity is 6.5 mmt. According to sources, PLL found that it was not advisable to stretch the plant to its maximum design capacity, and hence, it could be operated at 22-23 million cubic meters per day (mmscmd), which represents 6.2 mmtpa ? meaning an additional capacity of 1.2 mmtpa.

Due to the non-availability of pipelines, PLL has refused to commit the commencement date of supply unless RGPPL commits a firm commissioning date. However, in the case of a failure, RGPPL will have to take or pay obligations to PLL.

As reported by FE, RasGas has offered to supply LNG at the price at spot market regime. However, PLL has proposed that even if it is based on spot market, it would have to be the average cost of spot cargoes during previous 12 months at Henry Hub net-backed FOB ex-Ras Laffan, or based on Nymex Futures net-backed FOB ex-Ras Laffan in 2007.



Source: The Financial Express, Mumbai, August 19, 2006
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