Dabhol LNG terminal work to restart by end-October

Vol 11, PW 11 (04 Oct 07) Midstream & Downstream

Work on the incomplete LNG import terminal and regassification facilities at the stricken Dabhol project in Maharashtra is expected to resume by the end of this month.

Contractors Punj Lloyd and Whessoe had â€کdemobilised’ their equipment from the construction site some three months ago over unpaid bills from project owner Ratnagiri Gas and Power – owned by GAIL, NTPC and the Maharashtra government. “Punj Lloyd and Whessoe are owed around Rs200cr ($50m),â€‌ says a Ratnagiri Gas source.

“In addition about Rs12cr is owed to various consultants.â€‌ Ratnagiri Gas says it could not pay because of a “financial crunch caused by a cost overrun of Rs1900cr ($475m)â€‌ in the total cost of completing the project.

But matters have now improved, “thanks to NTPC sanctioning a loan of Rs500cr ($125m) early August.â€‌ A meeting is scheduled sometime this week, says Ratnagiri Gas, with Punj Lloyd and Whessoe to discuss the mobilisation schedule and restart of work.

“We have told both Punj Lloyd and Whessoe that dues will be cleared at the earliest and they have agreed to mobilise equipment and restart work in about two or three weeks time.â€‌ Punj Lloyd and Whessoe have been assigned all-non marine work for the LNG terminal under the Delhi-approved plan to revive this stricken 2.5m t/y LNG import terminal and 2150-MW power station originally promoted and owned by disgraced and bankrupt energy trader Enron.

“The regassification facility, three storage tanks and the dredging of the sea adjacent to the jetty have to be completed by Punj Lloyd and Whessoe,â€‌ says our source. “About 80% of these facilities is complete and the entire work is likely to be completed by the third quarter of 2008.

â€‌ Adds our source: “We expect to get LNG at our own terminal end 2008 onwards.â€‌ Also unpaid is Dutch dredging contractor Van Oord, who is owed about Rs65cr.

“Van Oord has also demobilised its equipment as we’ve not paid them.â€‌ Ratnagiri Gas says it is in talks with all its contractors and consultants to pay up all dues.

“Because contractors and consultants appreciated the situation we were in, no arbitration or any case has been filed against us.â€‌