Dabhol plant to go on LNG from next week
1-Jan-1970


Dabhol power plant, owned by Ratnagiri Gas and Power (RGPPL), will go on liquified natural gas (LNG) from next week. Gail India, a stakeholder of RGPPL, has completed the Dahej-Uran and Uran-Panvel-Dabhol pipelines. Petronet LNG has tied up imports of 1.5 MT of liquified natural gas (LNG) from Qatar and Algeria. National Thermal Power Corporation (NTPC) has infused Rs 500 crore more to complete the plant.

?We need five days to switch over once LNG is in place. At first, Block-II, which generates 740 MW using naphtha will switch to LNG. After eight weeks, another 740 MW Block-III can also run on LNG. Block-I, which has 670 MW capacity would be linked by December 15. At present, revival activities are on for Blocks I and III,? said RGPPL managing director Chandan Roy.

Out of the total 2,150 MW that Dabhol will generate, 95% will be sold to Maharashtra. Last month, MahaDiscom signed a power purchase agreement with the company. Power will be supplied at a fixed cost of 98.50 paise and a variable cost of Rs 1.96, taking the total cost per unit to Rs 3.02, inclusive of value-added tax (VAT) and interest component.

The state cabinet has permitted a concession in VAT to Dabhol on gas bought from Gail. This will cut the cost power to Rs 2.95 per unit. This is expected to put a burden of around Rs 40.17 crore on exchequer annually at the gas price of $6 per million British thermal units (mBtu).

RGPPL will get the LNG at a cost of $4.93 per mBtu. Initially, Petronet will supply 1.5MT of LNG which will be increased to 2.1MT, when the power plant runs at its full capacity of 2,100MW. The price of $4.93 per mBtu will remain till September 2009.

?Petronet was asked to work out an average price by mixing costlier cargoes bought from spot markets with cheaper gas sourced from Qatar on a long-term contract. This formula has enabled Petronet to contract additional gas for Dabhol from spot markets at prices of up to $8 mBtu but offer it to Dabhol at $4.98,? said government sources.


Source: The Economic Times, Mumbai, 28 June 2007
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