The Hindu Business Line : Petronet losing $70,000 a day on gas pipeline delay

At a glance
GAIL has commissioned first stretch of Dahej-Panvel-Dabhol pipeline from Dahej to Surat
Remaining portion of the pipeline is under progress and gas supply to the Dabhol plant is expected by June end.

New Delhi June 1 With the Dabhol power plant yet to be linked with a gas pipeline, Petronet LNG Ltd (PLL) is taking a hit of $70,000 per day.

This is due to a delay in completion of the pipeline to move gas to Ratnagiri Gas and Power Ltd (RGPPL) — the erstwhile Dabhol project. PLL has to bear the burden of high inventory cost, as it has had to engage a ship to store the LNG.

A senior PLL official said: "Currently, we have hired a tanker to store 80 million standard cubic metre per day (mmscmd). The $70,000-per-day loss includes ship hire charges. We have started sourcing LNG for Dabhol from April this year."

Regarding diversion of LNG sourced for Dabhol to other customers, the official said that a maximum two cargoes per month could be diverted.

The company has brought spot cargoes from various sources including Qatar, Algeria, Oman and Egypt. LNG is available in the spot market at a price level of about $8 per million British thermal unit (mBtu).

The LNG being imported for firing the Dabhol power plant was being sold to various power and fertiliser companies as the pipeline between Dabhol and Dahej, where the Petronet plant is located, was not fully operational.

On completion

Subsequent to the completion of the Dahej-Dabhol pipeline, PLL is looking at supplying three mmscmd of gas to the Dabhol plant. The first phase of the 740-MW Dabhol power plant would require around three mmscmd, while the second phase would increase the requirement to eight mmscmd.

GAIL, which is laying the pipeline, commissioned the first stretch of the Dahej-Panvel-Dabhol pipeline from Dahej to Surat — of 100-km length — on May 7, with the gas-in at Dahej.

The commissioning activity in the remaining portion of the pipeline is under progress and the gas supply to the Dabhol Power Plant is expected by June end.

GAIL is laying the 576-km long Dahej-Panvel-Dabhol pipeline at an estimated investment of Rs 3,200 crore. The pipeline has a design capacity of 12 mmscmd and will carry R-LNG from PLL's terminal at Dahej to Dabhol.

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