GSPC inspired squabble hits second jetty at Dahej

Vol 12, PW 23 (23 Apr 09) Midstream & Downstream

Plans to build a second jetty at the Petronet-LNG import terminal at Dahej for larger and more LNG tankers are going nowhere thanks to GSPC delaying attempts by Petronet-LNG and the Gujarat Maritime Board (GMB) to begin the project.

PETROWATCH learns that Petronet-LNG has waited more than a year since the March 7, 2008 approval by its board for clearance from the GMB, which has the final power to allow construction of the jetty. But a source tells us that GMB’s hands are tied by attempts from GSPC to get more R-LNG from Dahej as the price of the state’s approval.

Of course, none of this is in black and white, but privately, GMB officials tell us they’ve been asked to withold their approval until the jetty is cleared by GSPC. â€‌This issue is being handled at the highest level in the (Gujarat) government,â€‌ says a source.

In April 2008, Gujarat’s energy and petrochemicals department said it should be consulted by the GMB before authorising any LNG terminal expansion. Subsequently on July 21 last year, GMB sought a No Objection Certificate (NoC) from the energy department for the second Dahej jetty, but has yet to hear anything.

If approval had been given, as hoped by Petronet-LNG, towards the end of last year, contracts would have been awarded and construction begun last month to have the jetty ready by 2011. The GMB, we are told, may be the biggest loser in this process because it will lose new revenue.

â€‌GSPC continues to get R-LNG from Dahej,â€‌ we hear. â€‌But the GMB gains nothing.

â€‌ Last year, the GMB earned Rs54.5cr ($12m) from Petronet-LNG from waterfront royalties – the highest among all ports and jetties under its control. With the second jetty, this revenue could double.

GMB’s agreement with Petronet-LNG provides for a 20% increase in waterfront royalty after every three years, which is now cash foregone. Then, â€‌GMB faces the ignominy of being bossed around in its own territory by GSPC.