Suresh Mathur warns of GAIL LNG threat

Vol 5, PW 20 (21 Nov 01) Midstream & Downstream

Shastri Bhawanis worried at possible competition for Petronet-LNG if GAIL acquires Enron's ready-to-use LNG terminal at Dabhol.

We learn ministry mandarins are "surprised" at reports of a possible GAIL/Tata joint venture to buy the Dabhol LNG terminal and don't want this to cut into Petronet-LNG's market for Dahej and Kochi LNG. Fear stems from a 2nd November letter from Petronet-LNG managing director Suresh Mathur to oil secretary Vijayendra Kaul in which Mathur warns that the GAIL/Tata proposal to acquire Dabhol LNG terminal will conflict with Petronet-LNG's interests if it sells Dabhol gas to markets in Gujarat, Madhya Pradesh, Uttar Pradesh, Rajasthan, Punjab, Haryana and Delhi.

Likewise Mathur doesn't want GAIL to extend the Dahej-HBJ pipeline to Maharashtra. And if it acquires Dabhol's LNG terminal, Mathur calls on GAIL to shelve Enron's original plan of laying pipelines in Gujarat and Kerala.

This is not all. Mathur clearly sees a GAIL takeover of Dabhol as a serious threat because he feels that GAIL will have to look for new markets to sell the balance.

Enron's Dabhol power station requires maximum 2.5m t/y LNG, whereas the capacity of the Dabhol LNG terminal is 5m t/y. "The balance could be marketed by them in these areas if such pipelines are laid, said Mathur.

This is considered a possible threat."