Petronet-LNG moves closer to power plant at Dahej

Vol 13, PW 4 (30 Jul 09) Midstream & Downstream

Petronet-LNG will soon realise its two-year-old dream of setting up a 1200-MW gas-fired power plant adjacent to its LNG import and re-gasification terminal at Dahej.

PETROWATCH learns that Dahej SEZ, a joint venture company promoted by ONGC and the Gujarat Industrial Development Corporation, is ready to allocate 50 hectares of land adjacent to the LNG terminal for the proposed power plant. Set up in August 2006, Dahej SEZ owns 1740 hectares of land, which includes the site of the Petronet-LNG terminal.

“Last month Dahej SEZ gave us two or three options for land next to the terminal,â€‌ confirms a source. Unfortunately, the Gujarat Maritime Board is not so fast in dealing with Petronet-LNG’s request for a second jetty.

“We are answering some queries raised by the GMB,â€‌ adds a source. “After that they should issue us a formal letter by next week.

â€‌ Another source adds Petronet-LNG will formally request Dahej SEZ for land after it receives GMB clearance for the second jetty. “A second jetty is critical to ensure continuous and uninterrupted supplies of LNG for the terminal and gas for the power plant,â€‌ we hear.

Once it has been allotted land for the second jetty, Petronet-LNG tells us it will formally begin the application process to set up the power plant. Petronet-LNG began moves to diversify into the power sector on August 30, 2007 when it formally applied for land to build a power plant, later hiring Gurgaon-based consultant Lahmeyer International to prepare a Project Feasibility Report.

Lahmeyer proposed a plant with three turbines of 370-MW each, totalling 1110-MW, with the remaining 80-MW generated using â€کcold energy’ from the LNG terminal. Once all land approvals are in place, expect Petronet-LNG to issue a tender for a consultant to prepare a Detailed Feasibility Report.

Under India’s â€کmega-power’ policy, construction of electricity plants in excess of 1000-MW capacity can benefit from substantial tax breaks, including the duty-free import of material and equipment to set up the plant.