AK Singhal of NTPC opposes SCI role for Dabhol LNG

Vol 12, PW 24 (07 May 09) Midstream & Downstream

Moves to bring in a LNG cargo to the revived Dabhol import terminal in May before monsoon rains have been scrapped thanks to objections from NTPC over the selection of a long-term port operator.

Ratnagiri Gas, a 50:50 joint venture between NTPC and GAIL, had wanted to hire state-owned Shipping Corporation of India (SCI) for four years as port operator. One of SCI’s first tasks would have been to commission the LNG terminal by bringing in a test LNG cargo in early May.

In preparation SCI had begun gearing up to test systems at the import terminal by conducting a mock berthing drill around April 27 by using an empty tanker hired at $20,000/day. If the mock drill had been successful, the plan was to bring in a cargo of LNG before May 15.

But the idea was scrapped after objections from NTPC director finance AK Singhal at an April 9 meeting of Ratnagiri Gas directors, according to a witness.“We explained to the Board why we wanted SCI during the two month commissioning period and after,â€‌ a source tells PETROWATCH.

“First of all SCI is a government company and has been doing this work for Petronet-LNG at Dahej.â€‌ Not only this, SCI was ready to sign a four-year port operations contract whereas most private operators insist on a minimum 10-year contract.

“As we are also a government company SCI was not insisting on a formal contract,â€‌ we hear. “All it wanted was a comfort letter saying it would get a four-year contract from October 1.

â€‌ But this was not enough to convince Singhal who objected,insisting that a port operator for beyond October should be chosen only through tender and that SCI should be retained for the two-month commissioning period only. With the Board divided, the decision to hire a long-term port operator was shelved and SCI understandably declined to commission the LNG terminal unless it was awarded the four-year contract to operate the port.