Ministry opposes sale of Dabhol's LNG terminal | india | Hindustan Times
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Ministry opposes sale of Dabhol's LNG terminal

india Updated: Sep 25, 2006 18:02 IST
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The power ministry on Monday opposed hiving off the LNG terminal from the Dabhol power plant, a proposal being considered by the government to check cost and time over-runs in completing the terminal.

"It will not help the project... The LNG terminal was part of the project when it was being built," Power Minister Sushilkumar Shinde told reporters in New Delhi.

He was replying to a query regarding the ministry's view on a proposal being considered by Cabinet Secretariat to bifurcate the project and sell the LNG unit to another firm.

"The power ministry has not mooted this proposal," he said.

Ratnagiri Gas and Power Pvt Ltd, the GAIL-NTPC joint venture which owns the Dabhol plant, had estimated at 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, the terminal needs an additional Rs 1,000 crore. Together with the transfer cost of Rs 1,790 crore the total cost would come to about Rs 3,500 crore, a price in which a new 7.5 million tonnes per annum LNG plant can be built.

Cabinet Secretary B K Chaturvedi at a meeting in August had observed the terminal may be sold to Petronet LNG Ltd, which would also be responsible for sourcing natural gas.

Shinde also said the Dabhol project would restart generation on imported naphtha from October. 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.