Petronet-LNG hires Evonik for Gujarat power plant DFR

Vol 13, PW 7 (10 Sep 09) Midstream & Downstream

Petronet-LNG has hired Noida-based Evonik Industries to prepare a Detailed Feasibility Report (DFR) for a gas-fired power station it wants to set up near its Dahej LNG terminal in Gujarat.

PETROWATCH learns Evonik’s appointment was confirmed on August 28 and that Petronet-LNG has asked the wholly owned subsidiary of Evonik Energy Services GmbH of Germany to submit a DFR on the proposed 1200-MW power station in 14 weeks. Petronet-LNG short listed “three to four consultantsâ€‌ around six months ago to do the feasibility report but was waiting for confirmation of land allotment adjacent to its 10m t/y Dahej terminal before it went ahead.

After two years of prolonged effort, Petronet-LNG in mid-August finally secured a commitment of 55 to 60 hectares in a Special Economic Zone owned and operated by Dahej SEZ, a joint venture promoted by ONGC and the Gujarat Industrial Development Corporation. Now that it has the land, Petronet-LNG plans to approach the union environment ministry for permission to set up the power station, while it waits for the feasibility report from Evonik.

“We will also hire a consultant to carry out financial due-diligence on the power plant,â€‌ adds a Petronet-LNG source. “In fact, we will ask the financial consultant to carry out due-diligence on two power plants: one at Dahej and one at Kochi.

â€‌ Offshore Kochi, Petronet-LNG is setting up a 2.5m t/y LNG terminal at Puthuvypeen Island. “Each power plant (at Dahej and Kochi) will generate 1200-MW,â€‌ we hear.

Petronet-LNG estimates total investment for both power plants at Rs7000cr (approximately $1.4bn). “Construction will be funded by a mixture of debt and equity,â€‌ adds a source.

Petronet-LNG believes it will take a little more than 30 months to set up a 1200-MW power plant at Dahej. 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.