Ratnagiri Gas and Power Pvt. Ltd (RGPPL) is working on a new business plan for its Dabhol gas import terminal in coastal Maharashtra, two officials familiar with the plan said, before starting a project to make it an all-weather port that will bring in more liquified natural gas (LNG) cargoes.
RGPPL, which runs the Dabhol power plant and LNG terminal in Ratnagiri district, now receives cargoes only between October and May, due to lack of a breakwater to protect vessels from choppy seas during the monsoon months. The company plans to build a breakwater facility at a cost of Rs800 crore, and is currently de-merging its power and LNG businesses into separate entities.
RGPPL is owned by NTPC Ltd and Gail (India) Ltd with both holding 25.51% stake each while financial institutions hold 35.47% and Maharashtra State Electricity Board holds 13.51%.
“Raising funds for the breakwater facility seems difficult right now,” said a Gail (India) official, one of the two people cited above, who spoke on condition of anonymity.
“We have thus decided that after the demerger, which is under way, we will have a separate business plan for the LNG terminal. This will help us find financiers for the breakwater facility and infuse fresh equity.” The official did not reveal details of the business plan. Gail India and NTPC did not reply to emails sent on Wednesday. An RGPPL official, the second of the two officials, said NTPC is reluctant to fund the breakwater facility and that if it declines to fund the same, Gail may have to look into financing the project entirely on its own.
RGPPL has decided that equity and debt for the breakwater facility will be in the ratio of 1:1. “So, we would be raising Rs400 crore through loan from existing lenders and the balance Rs400 crore would be shared between NTPC and Gail. If NTPC declines to invest, Gail will have to look into how to finance the project,” said the Gail India official.
“RGPPL has signed Gail on as a consultant for the breakwater facility. The tendering process is on and would be finalized in three months,” said the second official quoted above.
On its part, RGPPL has begun the tendering process for the project. The company hopes to open the bids by the end of this month or early February. “Before placement of order, we have to make sure that the funds are available,” the second official added. A breakwater takes around three years to build.