High level endorsement of Ennore LNG project

Vol 4, PW 16 (13 Sep 00) Midstream & Downstream

The United States and Indian governments are set to give the Ennore LNG and power project a "government-to-government" seal of approval by endorsing a 'Joint Development Agreement' between the Power Trading Corporation and project promoter Dakshin Bharat Energy Consortium.

The signing - by Indian commerce minister Murasoli Maran and his US counterpart Norman Mineta - is tentatively scheduled for September 14th during the visit of Indian prime minister Atal Bihari Vajpayee to Washington DC. A source close to the project said DBEC and PTC will begin detailed Power Purchase Agreement negotiations soon after, and that these "are expected to be completed by year end".

Earlier doubts over the viability of the 2.5m t/y LNG terminal and 1,850 captive power plant have subsided following recent progress in power offtake talks with Kerala, Karnataka, Tamil Nadu, Pondicherry and Madhya Pradesh. During negotiations on August 11th at the Delhi office of the Power Trading Corporation, Tamil Nadu 'nominated' 750 MW and Karnataka 'nominated' 700 MW for ultimate subscription.

"We are still in discussions with Kerala and are optimistic that they will take around 200-MW," said a source, "Pondicherry may take 40-50-MW and Madhya Pradesh has indicated that they may wish to take up to 400-MW."