Dabhol does not need breakwater: Ministry of Power

Vol 10, PW 8 (10 Aug 06) Midstream & Downstream

Power ministry officials have dismissed a proposal by GAIL to re-build the breakwater offshore Dabhol under plans to revive the 5m t/y LNG terminal and power project.

Their argument is that only 2.1m t/y LNG is required to fuel the power station, says a source. And to bring in this LNG you do not need a breakwater.

Government-owned Ratnagiri Gas and Power is reviving the former Enron-promoted Dabhol project with the help of its parent companies GAIL and NTPC. GAIL is handling all aspects of the LNG terminal and NTPC is charged with the power project.

Progress was discussed at a meeting in Delhi presided over by power secretary RV Shahi on 12th July. GAIL told the meeting that UK-based Whessoe Oil & Gas had been awarded a contract worth Rs419cr ($93m) to complete non-marine works including the LNG terminal.

GAIL also told the meeting that Anglo-Belgian firm Besix Kier had offered to complete the jetty, tugboat berthing facility and breakwater for Rs770cr ($175m). (Besix Kier is the same company that in 1998 won the contract to construct marine facilities, including a breakwater, at Dabhol for the original owner Enron).

During the meeting, it seems power ministry officials politely reminded GAIL it has already been agreed that a breakwater is not required for operating the 2.1m t/y LNG facility. According to power ministry officials, the Dabhol power plant doesnt need the balance 2.9m t/y, which can be used for commercial sales by GAIL.

This (2.9m t/y) was not envisaged in the revival package for the power plant, we hear. GAIL and NTPC could, if they wished, separately invest in this (breakwater) for their commercial operations.

GAIL was clearly told that, it would not be appropriate to pass on the increase in tariff (that would result from building a breakwater) from the power project. GAIL was also told that the, addition of tugboat berthing was also not a part of the Tractebel report and therefore no new works should be included onto the cost of the project.