The Hindu Business Line : Power Ministry opposed to sale of Dabhol's LNG terminal

The Power Ministry has said it is opposed to the proposed sale of the LNG terminal adjoining the Dabhol power plant. A proposal on the issue was reportedly under consideration by the Government to check cost and time over-run in completing the terminal.

"It will not help the project... the LNG terminal was part of the project when it was being built," said the Power Minister, Mr Sushilkumar Shinde, responding to a query regarding the Ministry's view on the Cabinet Secretariat's proposal to bifurcate the project and sell the LNG unit to another firm.

He clarified that the Power Ministry had not mooted the proposal.

Ratnagiri Gas and Power Pvt Ltd, the GAIL-NTPC joint venture which owns the Dabhol plant, had estimated Rs 710 crore as the cost for completing 15 per cent of the balance work on the 2.5-million tonnes LNG import and regassification terminal when they took over the Enron-owned plant last year.

However, according to current estimates, the terminal needed an additional infusion of Rs 1,000 crore. Along with the transfer cost of Rs 1,790 crore, the total cost would come to about Rs 3,500 crore.

At a meeting chaired by the Cabinet Secretary, Mr B.K. Chaturvedi, last month, it had been proposed that the terminal could be sold to Petronet LNG Ltd. Mr Shinde also said the Dabhol project would restart generation on imported naphtha next month. The cost of power could rise to Rs 6.60 per unit, he said, adding that the Maharashtra Government has given "verbal" commitment that it would need power from the 740-MW Block-II of the project.

Ratnagiri project

The 740-MW naphtha-fired Phase 1 of the 2,184-MW Ratnagiri project has largely been idle for the past five years following a dispute between its former owner Enron Corporation and the State Government over electricity payments. The project was taken over by Ratnagiri Gas and Power Ltd last year.

The project was subsequently restarted in May using naphtha reserves available at the station and remained operational till the end of June. However, after demand from the peak summer season slackened, the Maharasthra Government stopped buying power from the project. Mr Shinde also said the state-owned National Hydroelectric Power Corporation (NHPC) is planning an initial public offering. "NHPC's IPO is on the way. We'll go to the Cabinet soon," he said.

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