The Hindu Business Line : Dabhol terminal: Petronet seeks SBI Caps' due diligence

Lenders initiative
Following an initiative mooted by the lenders of the Dabhol project, led by ICICI Bank, SBI and IDBI, to bring in new partners for the terminal, PLL was approached

New Delhi , Sept 27

Petronet LNG Ltd (PLL) has asked SBI Caps to undertake commercial and financial due diligence of the five-million-tonne LNG import terminal at Ratnagiri Gas and Power Pvt Ltd (RGPPL), formerly known as Dabhol Power Corp Ltd, before the company firms up its views on participating in the project.

According to senior officials, an internal team of the company along with its strategic partner, Gaz de France, is doing the technical due diligence of the terminal. RGPPL is run by gas transmission firm GAIL (India) Ltd and NTPC.

The capacity of the LNG terminal is five MMTPA, of which 2.1 MMTPA would be required for the power plant.

Following an initiative mooted by the lenders of the Dabhol project, led by ICICI Bank, SBI and IDBI, to bring in new partners for the terminal, PLL was approached.

Since it was a commercial decision, the Petroleum Ministry had left it to the Petronet board to take a call on the issue. Official sources told Business Line that two rounds of meetings have been held between the lenders and PLL.

Core competency

The sources, however, added that the lenders want new partners with appropriate core competency. Before any decision is taken, there is a need to understand what is in the offing, they said.

Earlier, the Petroleum Ministry had advised ICICI Bank to do valuation of the LNG import terminal. The lenders were looking at restructuring of RGPPL.

RGPPL owns the entire asset and was looking at separating the two business domains - power and LNG, the sources said, adding that that the name of PLL was proposed as the company is emerging as an LNG specialist.

The Petroleum Ministry was asked to explore the option for PLL to participate in the LNG part of the project.

The $2.9-billion project, built by Enron Corp, was shut down in July.

It had been shut for nearly five years until May, following a billing dispute with its sole customer, Maharashtra State Electricity Board (MSEB).

The Dabhol plant has been designed to eventually use gas and has affiliated facilities to import LNG but used costly naphtha between May and July due to delay in the completion of the LNG terminal.

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