Vol 3, PW 5 (31 Mar 99) Midstream & Downstream

They say that for every pipeline project that sees fruition, another ten never leave the drawing board.

Unocal in particular is no stranger to ambitious pipeline projects which are aborted because of war (Afghanistan) or local opposition (Bangladesh). Its latest plan, however, has a much greater chance of success, simply because the coordinates are already in place.

Petrowatch learns Unocal is actively considering the construction of a gas pipeline from the upcoming LNG terminal at Ennore in Tamil Nadu to the site of its proposed power plant at Bidadi near Bangalore, in Karnataka. Plans are at an early stage, but according to a source close to the project, Unocal is very serious about the project.

If it goes ahead, the company may have to re-work its plan for Bidadi, a proposed 200-MW power combined cycle power plant, initially conceived to run on naphtha, with the potential to run at 400-MW capacity. Getting access to re-gassified LNG from Ennore should not be a problem.

Unocal holds a 17% equity stake in the Dakshin Bharat Energy Consortium, which in December 1998 beat Shell, Enron, and Petronet-LNG in a tender to finance, build, own and operate a 2.5m tonnes a year (t/y) LNG terminal and 1,886-MW power project at Ennore. Dakshin Bharat has already announced plans to build a pipeline network to evacuate any surplus gas from Ennore.

No doubt Unocal will now insist that priority be given to Bidadi. For the moment TIDCO is negotiating with the consortium to see if it can push the electricity tariff down further.

Barring an investigation (See Story 2), PPA talks should begin in earnest by early April.

LNG Summit