New Delhi: The operator of the Dabhol power plant, Ratnagiri Gas and Power Pvt. Ltd, plans to invite bids in two months to build a breakwater—offshore structures to break the intensity of waves—so it can operate its liquefied natural gas (LNG) terminal on the west coast throughout the year.
Currently, the terminal can be optimally used only between October and May as there is no breakwater that can protect ships from choppy seas during the monsoons.
“The process for the finalization of the tender is on,” said managing director A.K. Ahuja. “We expect firms such as Punj Lloyd, Gammon, among others, to participate in this tender.”
Fuel factor: A file photo of the Dabhol power station. The plant uses natural gas, typically transported by ships in liquid form. AFP
The construction of the breakwater, expected to take three years, will require an investment of Rs600 crore. It will help the cash-strapped utility’s plans of leasing out a part of its terminal capacity and earn user charges.
The LNG terminal will start operations shortly with an initial capacity of 1.2 million tonnes per annum (mtpa), to be gradually increased to its full capacity of 5 mtpa.
The Dabhol power plant is fuelled by natural gas, typically transported by ships in liquid form. While 2.1 mtpa from the terminal will be required for the power project, the remaining capacity can be rented out.
The project currently generates around 950MW and the utility is hopeful of reaching full capacity generation of 1,950MW by March.
India has only two natural gas regasification terminals, with new capacities being planned and executed. Both are located in Gujarat; one is owned by Petronet LNG Ltd with a capacity of processing 6.5 mtpa and the other by Shell India Pvt. Ltd with a capacity of 2.5 mtpa.
Analysts are cautious about the terminal’s feasibility.
“In the event of spare capacities increasing for LNG terminals across the country, the Dabhol LNG terminal’s feasibility needs to be examined,” said Deepak Pareek, a Mumbai-based research analyst at Angel Broking Ltd.
The supply of natural gas in India is around 135 million standard cu. m per day (mscmd) against a demand of 200 mscmd. Of this, LNG accounts for around 21 mscmd.
State-owned NTPC Ltd and GAIL (India) Ltd own 29.65% each of Ratnagiri Gas and Power and the Maharashtra government has a 15% stake. The remaining is owned by public sector banks and financial institutions.
This consortium had acquired the company, which was earlier named Dabhol Power Co., after its original promoter Enron Corp. collapsed in 2001.
The cost of building the project was estimated to be Rs10,038 crore at the time of asset transfer to the government in mid-2005. It has since risen to Rs12,897 crore.