The Hindu Business Line : GAIL mulls acquiring Dabhol LNG terminal

Mumbai March 24 GAIL (India) Ltd may acquire the Liquefied Natural Gas terminal of Ratnagiri Gas and Power Private Ltd at Dabhol, said Mr Murli Deora, Union Minster for Petroleum and Natural Gas, at a news conference here on Saturday.

GAIL holds 28.33 per cent equity in Ratnagiri Gas which has under it a 2,150-MW power plant and a five million tonnes per annum LNG terminal and re-gasification facility. Dr U.D. Choubey, Chairman and Managing Director of GAIL, said that the company's board would be meeting next week to consider a proposal for acquiring the terminal.

"Hiving off of LNG terminal at Dabhol is one of the options being considered at the very highest level of the Government. We should be given the first right of refusal in the event of a hive-off," Dr Choubey said.

With the cost of revival of the beleaguered Dabhol project further escalating, the Government is now considering hiving off the LNG terminal from the power plant and selling it to another company.

Investment needed

The LNG terminal requires an additional Rs 500 crore for completion. Several big energy companies have shown interest in acquiring the terminal.

Dr Choubey said that so far no decision has been taken and only the board can take a view on it as it involves an investment of Rs 500 crore, he said.

Gas supply pact

The CMD said that the Empowered Group of Ministers for revival of the Dabhol project felt that there should be a long-term tie up for gas supply. "We are negotiating with Reliance Industries Ltd for procuring gas from its KG basin gas field. A team from GAIL and RIL has been put in place to work out a solution. A six-member team will hold its first meeting soon. We will make sure that the plant will not be starved of gas anymore," he said.

Of the total five-mtpa LNG capacity of the gas terminal at Dabhol, about 2.9 mtpa would be sold as merchant sales and the rest supplied to Dabhol power plant.

Dr Choubey said that GAIL was hopeful that the plant would run at its full capacity by May 27.

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