One step closer to an آ‘end-userآ’ price for Dahej LNG

Vol 5, PW 4 (11 Apr 01) Midstream & Downstream

Power producers in India desperately want to know how much they must pay for regassified LNG from Dahej.

We can't tell them the end-user price because we don't know it yet, but we do know GAIL - which will sell two thirds of the gas from Dahej - is quietly ecstatic it will be cheaper than earlier thought. GAIL tells us the cost of shipping LNG to Dahej will add only $0.40c to the end-user price against the $0.60c earlier thought.

Reason On 27th and 28th March, Petronet-LNG formally accepted a time-charter rate proposed by a shipping consortium of Mitsui OSK Lines and Shipping Corporation of India: $68,900 per day per tanker, considered low by international standards. Mitsui will use two LNG tankers to ship 5m t/y of Qatari LNG to Dahej over 25 years.

This price includes an estimate of port charges at Dahej. Same story with regassification.

GAIL reckons regassification will add between $0.65-70c to the end user price against $0.80c earlier thought. Reason On 23rd December Petronet-LNG accepted an EPC bid from Ishikawajima Harima Heavy Industries to construct regassification facilities at a price of just $317m, again considered low by international standards.

So what's missing from the equation The price of LNG delivered 'Free On Board' at Qatar and transportation through a pipeline in India. Find these out and you've got your end-user price for Dahej LNG.