GAIL (India) Ltd is set to receive LNG cargo from Russia’s Gazprom on Friday to commission the Dabhol LNG terminal in Maharashtra.
The cargo carrying 1.38 lakh cubic metres of LNG equivalent to 80 million standard cubic metres of natural gas is expected to berth at the Dabhol terminal.
The five-million-tonne a year Dabhol plant has seen its own share of misfortunes. GAIL had earlier this year (in March) got LNG cargo for commissioning the plant, but had to abort it following equipment failures. According to sources, GAIL is being very cautious this time round, and expects that by next month the plant will be commissioned. However, it will be fully commissioned only after the breakwater is constructed.
Breakwater is very important for an LNG terminal, as it helps in smooth berthing of the ships. Without breakwater, berthing is very tough during the monsoons.
Spot market
Sources said the cargo had been bought from the spot market. Though they remained non-committal on the price, the prevailing spot LNG price is $15/mBtu (million British thermal units). Currently, gas price is linked to Brent crude.
In Ratnagiri Gas and Power Co Ltd, erstwhile Dabhol project, GAIL has 31.52 per cent stake, NTPC has 31.52 per cent, 16.68 per cent is with Maharashtra State Electricity Board (MSEB), and remaining 20.28 per cent with financial institutions.
The project has 1,967-MW power plant and a five mt a year LNG terminal.
Long-term supplies
GAIL, which has started sourcing LNG into the country, has also been looking for long-term suppliers. It has recently tied up with Gazprom for supply of 2.5 million tonne LNG for 20 years. The supplies are expected to start from 2018-19. This LNG will be sustainable priced with an oil-indexed formula and delivered to Dahej, Dabhol and Kochi terminals in India.
GAIL Chairman and Managing Director B.C. Tripathi has often been quoted as saying that to meet the growing appetite of the Indian market, GAIL has been expanding its global presence to secure long-term gas supplies.