Petronet to start gas supply to Dabhol soon

The Dabhol power plant in Maharashtra is likely to start generating electricity using gas as feedstock from second week of August once promoters sort out payment issues. Petronet LNG Ltd is importing gas in liquefied form (LNG) in ships from RasGas of Qatar at its Dahej terminal under a short-term deal. After regassification, the gas is transported through the GAIL?s pipeline to the power project.
Choubey said GAIL was in talks with Sonatrach of Algeria for import of 2.5-5 million tons of LNG on long-term basis from 2010 once Dabhol plant?s LNG receipt facility is fully completed.
This is the first time that Dabhol plant will receive gas supplies since beginning operations in May 1999. The first unit of Dabhol plant began operations on naphtha in May 1999, but was shut down in May 2001 after its sole customer MSEB refused to buy power saying it was expensive.
Petronet on Monday signed a gas sales agreement with GAIL, Indian Oil and Bharat Petroleum for offtake of the short-term LNG it is importing from RasGas. Petronet is not allowed to sell the fuel directly to customers. The state-run firms are its principal offtakers and promoters.
GAIL India, an equal promoter in Ratnagiri Gas and Power Pvt Ltd ? the firm that owns the Dabhol power plant, on July 10 transported first ever gas to the plant through a newly built 577-km pipeline from Dahej in Gujarat but the plant could not take gas supplies as RGPPL could not provide guarantees for payment for the fuel.
GAIL had withheld gas supplies pending RGPPL furnishing a Letter of Credit of Rs 33 crore. RGPPL could not furnish the LC as it had not got a similar guarantee from its sole customer Maharashtra State Electricity Board for purchase of power.
?MESB has now got approval from the state government and LCs are being opened,? RGGPL head Chandan Roy said. He said the 740-MW Block-II would switch to gas in two weeks time while a similar capacity Block-III would come on gas after eight weeks. The 670-MW Block-I is scheduled to go on gas from December 15, he said.

Source: The Times of India, New Delhi, 24 July, 2007
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