The Hindu Business Line : GAIL may infuse more funds in Dabhol project

New Delhi April 29 GAIL (India) Ltd is favourably considering a Government proposal to infuse additional funds into Ratnagiri Gas and Power Private Ltd (RGPPL), the erstwhile Dabhol project.

The matter was considered by GAIL's board, which met last weekend, ahead of the empowered group of Ministers (EGOM) meeting on the project.

The State-owned gas transmission and marketing major needs board approval for infusion of additional funds.

Earlier, the company had taken the stand that it would invest another Rs 500 crore in the project provided it was given the liquefied natural gas (LNG) terminal of RGGPL.

Though GAIL will now wait for the Government to take a final call on hiving off the LNG terminal, the company will continue to make the first claim on it, sources told Business Line.

However, in case the terminal is not hived off, the infusion of additional funds will not have any adverse impact on GAIL's finance, as GAIL will get returns on its investment, they added.

The EGOM, which met on Saturday, is understood to have reviewed the RGPPL project status and asked the stakeholders to take steps for early completion.

At the meeting, according to sources, the stakeholders were asked to take steps to complete the LNG terminal as well as finish pending work on the Dahej-Uran-Panvel pipeline to transport LNG from Petronet LNG Ltd's Dahej terminal to Ratnagiri.

GAIL holds 28.33 per cent equity in RGPPL, which has under it a 2,150-MW power plant and a five-million-tonnes-per-annum LNG terminal and re-gasification facility.

RGPPL requires Rs 450 crore for revival of power plants and Rs 565 crore for the LNG works, but it does not have the money to pay the contractors.

The Government was considering the option of hiving off the LNG terminal and selling it in order to expedite the revival of the Dabhol project.

RGPPL holds both the assets of the power project - the 2,150 MW power plant and the five millions tonnes LNG.

Both GAIL and NTPC had initially infused Rs 500 crore each to take equity stake of 28.33 per cent.

At the time of equity infusion, the company was given the first right to buy the LNG terminal as also the right to sell additional LNG to other companies.

The LNG terminal requires an additional Rs 500 crore for completion.

Many big companies in the business are believed to have shown interest in acquiring the terminal. Meanwhile, GAIL is working on the Dahej-Uran-Panvel pipeline project at an estimated cost of Rs 1,830 crore, with a capacity of 12 MMSCMD.

However, the pipeline project has been delayed, leading to further delay in gas supply to RGPPL.

It has already been delayed by at least four months, as it was supposed to start by January-end.

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