Six want to use Dabhol as merchant LNG terminal

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

Aside from the test LNG cargo debacle, Ratnagiri Gas is pleased with the response to its advertisement seeking Expressions of Interest (EoI) from companies that want to use its LNG terminal at Dabhol as a merchant facility to import and regassify LNG on their own account.

PETROWATCH learns that Reliance Industries, Chambal Fertilisers, Essar, British Gas and NTPC all submitted EoIs by the April 15 deadline to use the Dabhol LNG terminal to import and regassify a minimum 5m t/y LNG for their own use. State-owned refiner Indian Oil was also interested, but since it did not have formal board approval by April 15 asked for a five-day extension to April 30 to complete internal formalities and submit an EoI.

“We extended the deadline for everybody to April 30 to accommodate IOC,â€‌ says a Ratnagiri source. With all EoIs now submitted, Ratnagiri Gas has begun work to draft Request for Proposal (RFP) documents for these six companies.

CRISIL, an India-based oil and gas consultant, will most likely be hired by Ratnagiri to prepare the RFP documents, but this awaits formal Board approval. Ratnagiri Gas wants to select a merchant user for its Dabhol facilities by end-September, around the time monsoon rains end and LNG tankers can berth.

This is also around the time Ratnagiri will land its first test cargo of LNG, after failing to bring one in this month (May). “We don’t want to waste more time on this,â€‌ says a source.

“We can’t bring in a test LNG cargo until October but we can use the interval to finalise the tolling user of Dabhol.â€‌ By the first week of May, RFP documents will be sent to the six companies that have expressed interest in using the Dabhol plant as a merchant facility.

In the coming weeks Ratnagiri Gas is also hoping to issue tenders to build a breakwater. “We have modified the scope of work,â€‌ adds a source.

“This should attract more companies.â€‌