India's GAIL invites expressions of interest for term LNG supply

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

27 Feb 2009

India's state-owned gas transmission utility GAIL is inviting expressions of interest for long-term LNG supply into Dabhol on the country's west coast, the company said Thursday. The LNG is meant for the Dabhol power plant in the western state of Maharashtra, which is run by Ratnagiri Gas and Power, a joint venture dominated by GAIL and state-owned power utility NTPC.
The plant has an associated LNG import and regasification terminal, which has not been commissioned yet. The terminal has a throughput capacity of 5 million mt/year, but will not be able to import that much until it gets a breakwater. In the absence of a breakwater, it will not be able to take in shipments during the monsoon season.
GAIL said the EOI should state the volume of LNG available for long-term supply to GAIL, the possible contract period, the LNG project from which the cargoes will be shipped, and the role of the party registering its interest.
The 2,150 MW Dabhol power plant currently operates only part of its capacity, using regasified LNG from importer Petronet, which is delivered through a pipeline from the latter's Dahej terminal in the nearby state of Gujarat.
The regasified LNG supply from Petronet is currently around 6 million cubic meters/day (211,800 Mcf/d), enough to fuel two of Dabhol's three power blocks, sources said earlier. The plant would need 9 million cu m/day to operate at full capacity, they added.
Petronet currently has a contract to supply R-LNG to Dabhol until September 2009, an official at the LNG importer said earlier. GAIL and NTPC are equal partners in RGP, with 28.33% each. The Maharashtra State Electricity Board holds 15% and a group of Indian banks the remaining 28.33%.
RGP has been reviving the power plant, which was formerly owned by Dabhol Power Company, a joint venture led by the now defunct US company Enron,  since April 2006.
The Dabhol plant began operations in 1999, running the first of its three planned blocks, but was idled in 2001 over a power tariff dispute with its sole buyer, the Maharashtra State Electricity Board.
Within RGP, NTPC is in charge of the power plant operations, while GAIL has been tasked with securing gas supply.

Source: Platts