The Hindu Business Line : Petronet plans to build 2 additional LNG tanks at Dahej

Expansion benefits
Under the deal, the two are likely to float a special purpose vehicle with equal partnership for the business.
With six tanks, the capacity is expected to go up to 15 million tonne.

New Delhi , Jan. 11

Petronet LNG Ltd, which is ramping up its Dahej facility, proposes to build two additional liquefied natural gas (LNG) tank farms, taking the total number of such tanks at Dahej to six. According to official sources, the company has two existing LNG tank farms and two are under construction.

To sign pact

Apart from these four, the company is all set to ink a memorandum of understanding with Gujarat State Petroleum Corporation (GSPC) for building two additional tanks at Dahej.

Sources told Business Line that under the agreement with GSPC, the two are likely to float a special purpose vehicle (SPV) with equal partnership for the business. The total cost of construction is estimated at $300 million .

Storage capacity

Currently, Petronet has a storage capacity of 5 million tonnes (since the company is working at 130 per cent capacity utilisation as it is operating at 6.5 million tonnes of capacity), which is likely to double once the ongoing construction of two tanks is completed. The tanks have a capacity of 1,48,000 cubic metre.

With six tanks, the capacity is expected to go up to 15 million tonnes. One of the sources of natural gas is LNG, which is imported in liquid form and then re-gasified before use. The LNG farm tanks are used for storage and re-gasification process.

On Schedule

The expansion of company's Dahej LNG terminal is progressing on schedule and would be completed by December 2008, he added.

Petronet is also planning to set up another receiving marine facility, which will include a jetty and a tressel at Dahej. Draft required for LNG vessels is almost 13 metres, the second jetty will be on the similar lines as the existing jetty, which runs 2.4 km into the sea, sources explained.

Plan for another jetty

Petronet is entering into a concession agreement with the Gujarat Maritime Board for the purpose. Besides, to mitigate any operation risks, Petronet is planning to build another jetty, as it has only one jetty at the terminal. Elaborating, the official said, the size of the LNG vessels are also getting larger, hence, Petronet is gearing itself to receive these vessels.

The estimated cost would be close to Rs 450 crore. The official said that a marine study is being undertaken by H.R. Wallingford.

PLL is one of largest LNG importer in the country. The company is expanding its Dahej LNG terminal from 5 million tonnes per annum (mtpa) to 10 mtpa by 2008-09 and subsequently to 12.5 mtpa. There is a huge gap between demand and supply of natural gas in the country. The Government has adopted a multi-pronged strategy to augment supplies and bridge the gap between demand and supply. The demand for natural gas for 2007-08 is estimated at 179.27 mmscmd, whereas the domestic production is estimated at 70.54 mmscmd.

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