Dabhol terminal set to receive first cargo on Dec 28

Ratnagiri Gas and Power Pvt Limited's (RGPPL) liquefied natural gas (LNG) terminal in Dabhol, Maharashtra, will receive its first cargo of LNG on December 28.

RGPPL is jointly owned by gas transmission and marketing company GAIL and power generation company NTPC, both public sector units.

A cargo ship, dispatched by Russian oil and gas company Gazprom, is expected to dock at the terminal that day. The long-delayed terminal is likely to be commissioned by February 2013.

"We are sure that this time we will be able to commission the terminal," says Prabhat Kumar Singh, Chairman of RGPPL and Director (marketing) at GAIL. Earlier this year, RGPPL had attempted to commission the terminal but could not do so due to technical problems.

GAIL had also put out tenders earlier, inviting suppliers to dispatch cargo to the terminal. However, they evoked no response.

"Commissioning cargos take more time. These days, the gas business is very dynamic and no supplier wants his ship to be stuck for a long time. This could be the reason for getting no response," says A.K. Jana, Deputy MD, RGPPL.

GAIL has a 25-year contract with RGPPL to use the terminal for import of LNG. Under the terms of the agreement, RGPPL will charge Rs 45 per million metric British thermal units (mmBtu) for its services.

However, this LNG cargo has a landing cost of $16.5 per mmBtu. The prescribed price for natural gas from Reliance Industries Ltd's KG-D6 fields, off the Andhra Pradesh coast, is $4.2 per mmBtu. The rate on the spot market for supply to the Indian west coast ranges between $9 to $12 per mmBtu.