The Hindu Business Line : Petronet plans to double capacity at Dahej terminal

"The board has already given in-principle clearance to the low-cost expansion and a detail feasibility report (DFR) has been commissioned. We expect the DFR to be cleared by the close of this fiscal and it will take 30 months from the date of investment decision,'' the CEO and Managing Director, Mr Suresh Mathur, told newspersons today.

The additional capacity will cater to the demand offered by power, steel and fertiliser units that are running below full capacity due to shortage of gas.

According to Mr P. Dasgupta, Director (Finance), a third storage tank - at a cost of Rs 750-800 crore - will double the Dahej capacity. In 2004, 2.5 million tonnes of LNG is to be imported from Qatar. Additional gas may require to be bought in the spot market to meet the domestic requirement, he said.

"The first-year import quantities have been tied up with mostly non-fertiliser and non-power customers. But power and fertiliser companies are also now seeking LNG to meet their huge unmet demand for fuel."

RasGas, the LNG supplier to Petronet, has been sounded out for the additional demand of one million tonnes during 2004-05.

However, indications are that it may not be able to supply the additional quantity.

Petronet will commence full capacity operations of five million tonnes in 2005 after it receives a second ship for transporting LNG from Qatar, where the India-dedicated liquefaction train too would also be ready.

The company received its maiden shipment of LNG at its Dahej import and regassification terminal in Gujarat on January 30, 2004 and commercial sale of natural gas regassified from LNG will begin from April this year.

IPO on the cards

Petronet's domestic market IPO will be shortly hitting the market. The issue, amounting to 34.8 per cent equity at Rs 13-15 per share, would help achieve financial closure of the project.

The IPO is expected to accrue around Rs 400 crore for the company, according to officials.

The company also plans to float a Rs 525-crore bond issue by June this year.

The funds would be used to repay some term loans.

The bond issue will be partially guaranteed by the Asian Development Bank, which has taken 5.2 per cent equity in the company, and is likely to carry a coupon rate of 5.75-6.25 per cent.

"The bonds will replace part of the Rs 1,804-crore syndicated debt which carries an interest rate of about nine per cent," said Mr Dasgupta.

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