Industry & Economy
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Power
Dabhol: GAIL in talks with LNG suppliers
Richa Mishra
New Delhi
,
July 20
WITH the decks being cleared for restarting the $2.9-billion Dabhol power plant, tough negotiations are going on between GAIL (India) Ltd and prospective liquefied natural gas (LNG) suppliers on the price of the feedstock for the plant.
According to a GAIL source, quantity is not a problem; the issue is the price. Negotiations are going on with the suppliers to get LNG within the target price, which is expected to be about $3.6 per million British thermal unit (MMBtu), the source told Business Line. Talks are on at the company-level, subsequently the LNG sourcing committee constituted by the Ministry of Petroleum and Natural Gas would conclude the negotiation. The convenor of the committee is the GAIL Chairman and Managing Director, Mr Proshanto Banerjee. However, if the price quotations from suppliers were found to be higher than the target price range then the Government would be approached to intervene, the source said.
For sourcing of LNG, GAIL is basically looking at the Pacific Basin and West Asia and negotiations are going on with suppliers in Indonesia, Malaysia, Australia, Abu Dhabi, Qatar and Oman.
The source claimed that there was enough capacity available. In fact, the product is being sold on spot basis. While GAIL is also exploring the possibility of importing natural gas from Africa, the source said it would not be for the Dabhol plant since the high freight charges could upset the end-price calculations.
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