India's Dabhol gas terminal to go on stream

India's largest gas distributor, GAIL (India), plans to start operations at its Dabhol liquefied natural gas import terminal in April, and will allow other companies to bring their cargoes in through the facilities for a fee, a senior company executive said.
The terminal, capable of handling 5 mm tpy, was set up in Dabhol to supply liquefied natural gas for the associated 2,150 MW Ratnagiri power plant -- India's single-largest gas-fired generation unit. However, the power plant itself has been struggling to reach full capacity because of a series of technical glitches. It may not need to import LNG as the government has allocated supplies from the gas to be produced by Reliance Industries Ltd. (RIL) beginning in April.

"We have invited expressions of interest from companies interested in using the terminal," GAIL's finance director R.K. Goel said at an industry conference. The company has received responses from several companies including Essar Oil, GVK Power and Infrastructure, British Gas, Mahanagar Gas and state-run fuel retailers, he said.
Goel said that initially the LNG terminal would work at less than half the installed capacity, because it doesn't have a breakwater facility to defend ships from the weather and rough seas.

"Although they say it can work only at 20 % (of capacity) without the breakwater, we think it should be up to 40 %," he said. Constructing a breakwater could take years, and the company has yet to sign up any contractors for the project, Mr Goel said.
GAIL owns a 28.33-% stake in Ratnagiri Gas & Power Pvt., which owns the power plant and the LNG terminal. State-run power firm NTPC also owns a 28.33 % stake in Ratnagiri, and the remaining equity is held by financial institutions and the Maharashtra electricity board.

The company is currently on the hunt for both short- and long-term contracts to secure LNG supplies for the terminal, said Mr Goel, who is also the chairman of Ratnagiri Gas.
"We are synchronising the commissioning of the terminal with receipt of first LNG cargo," R.K. Goel, director of finance at GAIL (India) told. "We hope the terminal will be commissioned by second week of April," said the official at the state-run gas transmission firm, which has bought the first LNG cargo from Shell India.''

Goel said GAIL was also scouting for places to buy LNG.
"Now the prices have come down to $ 6.5-$ 7 (per mm Btu) so we are looking at buying LNG both on spot and long-term contract basis," he said.