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Archana Chaudhary

Mumbai , Nov 7

PETRONET LNG Ltd (PLL) may take over and complete Dabhol Power Company's (DPC) unfinished five-million-tonne liquefied natural gas import terminal to help make the project attractive to a new buyer.

The Government has asked PLL to complete the gas terminal, which includes a special jetty and storage tanks, that is lying in a state of disuse since May 2001.

It is also understood to have asked NTPC to take over the 2,184-MW power project. However, the company is yet to reply to the Government in this regard. The Government is hoping that the efforts will help sell the power station and gas terminal.

A team of Petronet officials accompanied by a representative of Gaz de France, PLL's 10 per cent partner in its five-million-tonne Dahej import terminal, visited Dabhol a few weeks ago to survey the extent of work needed to complete the project.

The team, in its report submitted to the Union Government, has said it would cost $100 million (around Rs 451 crore) to "complete and revive" the LNG terminal. Also, it has suggested that two LNG storage tanks of the five that Enron had originally planned to construct be scrapped.

"At the time the Dabhol project was abandoned, two storage tanks had been completed while a third was partially constructed. The project can work well with these three tanks and we need not invest in putting up new tanks," a senior PLL official told Business Line.

Enron's LNG terminal has a capacity of five million tonnes, whereas the Dabhol power project needed only 2.1 million tonnes. The extra capacity was planned to be storage for trade.

Once the LNG import terminal is completed, the Government plans to sell the power project and the terminal as two separate units. According to an industry source, PLL plans to first complete the project and later bid for it when the sale happens.

However, there could be complications in selling the terminal as DPC had entered into an LNG purchase contract with Oman LNG LLC. In 2002, Oman LNG slapped an international arbitration suit on DPC that is yet to be resolved.

According to the source, the LNG terminal has been out of bounds for Punj Lloyd, the contractors appointed by Indian lenders led by Industrial Development Bank of India, to maintain the power project. "The LNG terminal does not have cathodic protection to keep it safe from the natural process of corrosion, requiring expensive repairs," the source said.

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