More delay in RFP for Dahej expansion and Kochi

Vol 9, PW 3 (18 May 05) Midstream & Downstream

Dont expect any imminent announcement about the arrival of the third and final tranche of contracted LNG to India from Qatar.

Continued delay in plans to double Dahej capacity to 10m t/y and construction of a new regassification terminal at Kochi are pushing back the delivery schedule for the balance 2.5m t/y committed by RasGas in the SPA it signed with Petronet-LNG on 31st July 1999 for a total 7.5m t/y. My guess is that the third tranche will be delivered sometime in 2008 or 2009, reveals a source.

But Petronet-LNG still has several Conditions Precedent to meet. It needs to agree on the LNG carriers, confirm an EPC contractor and sign gas sales agreements.

Until all this is done, RasGas wont be able to identify which train will provide the third tranche for India. RasGas will assign Petronet-LNG a train when it has confirmed a construction schedule (for Dahej and Kochi), adds our source.

You cant agree a delivery date too early because the take-or-pay conditions come into effect immediately. Petronet-LNGs third tranche will most likely come from one of the following three trains: Train 5 with a capacity of 4.7m t/y; Train 6 with a capacity of 7.6m t/y; or Train 7, also with a capacity of 7.6m t/y.

Train 4, with a capacity of 4.7m t/y, has already been allocated to Europe. Still unclear is if Petronet-LNG will receive its third tranche at Dahej or Kochi.

What is clear is that Petronet-LNG is still nowhere nearer selecting an EPC contractor for its Dahej expansion or Kochi. Petronet-LNG is still qualifying bidders and deciding the shortlist, he adds.

When thats over both sides can sit together and start working on a first delivery date. Sadly, this might take another few months.