Vol 3, PW 6 (14 Apr 99) Midstream & Downstream

Dabhol firmly underway, Enron will now be focusing on the next component of its drive into India: imports of LNG, principally to fire Phase I and Phase II, but also for sale to customers, not just in Maharashtra but also in Karnataka and Gujarat, via a yet to be constructed pipeline.

To date, Enron, through its affiliate Metropolitan Gas (Metgas), has signed two firm agreements for LNG imports into India. In August 1998, it signed an agreement with Oman-LNG for the import of 1.26m tonnes a year of LNG, with first delivery to Dabhol slated for 2001.

A second agreement has been signed with AdGas of Abu Dhabi for the supply of 0.54m t/y. The LNG imports are destined for Enrons planned LNG re-gassification terminal at Dabhol: optimistically scheduled for operation by 2001: initial capacity of 2m t/y, rising to 5m t/y.

Ram Srivastava, president and Chief Executive Officer, Dabhol Power Company, tells this report the total requirement for both Phase I and Phase II of the Dabhol Power Project will be about 1.8m t/y. Phase I will initially run on naphtha, while Phase II is geared to run only on LNG.

Srivastava does not see any surplus from this for sale elsewhere. Such an admission leaves Metgas with a problem: where to get LNG for supply to hungry customers Last week, a newspaper in the Gulf, Khaleej Times, confirmed what many have long suspected: Enrons plans for a 5m t/y capacity LNG plant in Qatar have collapsed for want of buyers.

Hardly surprising, therefore, that the Gas Authority of India (GAIL) waits for more details before responding to a reported Enron offer to sell it LNG.