GAIL and NTPC need at least $225m to revive Dabhol

Vol 10, PW 2 (18 May 06) Midstream & Downstream

GAIL and NTPC - the new owners of the Dabhol project need to spend at least $225m to complete the LNG import terminal and regassification facilities.

PETROWATCH learns GAIL submitted this figure in a presentation last week on 5th May in Mumbai to power secretary RV Shahi and other officials who are closely monitoring the revival of the stricken, Enron-promoted Dabhol power station and LNG terminal. GAIL and NTPC assumed control of Dabhol on 6th October 2005 under a settlement with the projects domestic and international lenders and set up a new joint venture called Ratnagiri Gas & Power.

GAIL argues that when it took over control, the LNG terminal and marine facilities were around 75% complete. Of the three storage tanks, the first tank was 90% complete, the second one was 85% complete and the third tank was 75% complete.

Regassification facilities were found to be 80% complete. GAIL estimates that from 5th May last year it would take 11 months to complete the storage and regassification works, on a best endeavour completion schedule.

GAILs contractor Whessoe has indicated the cost would be $100m plus taxes. Long delivery items have already been identified and field assessments as well as material reconciliation have been carried out.

Below is a status report of completion work of the LNG storage and regassification facility. Milestone Target date Progress till 4th May 2006 Proposed for next fortnight Remarks Vendor assessment (36 items) 30th April 2006 35 items completed Balance one item is under progress at site Ebara pumps (3LP + 4HP) to be sent to vendor works for inspection.

Recommended to be included under EPC contract Submission of report: Draft Report Final Report 28th Feb. 2006 28th March 2006 Draft report received on 3rd April and comments sent on 18th April GAIL/EIL preparing independent cost and time estimates Best endeavour completion schedule of 11 months and cost $100m plus taxes indicated by Whessoe Issue of enquiry 17th April 2006 Not available 29th April 2006 Tender enquiry issued on 29th April with bid submission date as 5th May 2006 Submission of bid by contractor 17th April 2006 Not available 5th May 2006 Award of EPC contract 15th May 2006 Not available 31st May 2006 Efforts being made to award by 21st May.

Whessoe team in India In-principle approval to EPC contractor to procure all long delivery items (21 packages) Not available Recommendation forwarded to Ratnagiri Gas and Power (new owner of Dabhol) on 21st March 2006 FOI issued to Whessoe for 21 packages on 21st April 2006 Power of attorney for order yet to be issued