Balyan wants GSPC help for Dahej expansion

Vol 14, PW 4 (12 Aug 10) People & Policy

Newly appointed Petronet-LNG managing director AK Balyan seems to have his priorities clear.

PETROWATCH learns Balyan wants to aggressively tackle capacity problems at the Dahej LNG receiving terminal by adding two additional storage tanks to the four 148,000-cubic metre capacity tanks already installed. He also wants Dahej’s most important customer, Gujarat state-owned GSPC, to help smooth out the land acquisition process with the state government and share some of the capital costs of installing the two new tanks.

In the first week of August, Balyan contacted senior officials in the Gujarat state government and GSPC managing director Tapan Ray about increasing the 10m t/y Dahej terminal’s capacity immediately. “Balyan called us at the beginning of this month,” confirms a senior Gandhinagar source.

“But we’ve yet to decide what additional infrastructure is needed. We’ll see if the two additional tanks can fit on existing land at Dahej or if additional land is required adjacent to the terminal.

” Gujarat Industrial Development Corporation, he adds, will supply any additional land required for this estimated “twin-tank” project, estimated to cost around $500m. Many recall when GSPC pledged to help Petronet-LNG with the LNG terminal expansion way back in January 2007 by signing a MoU during the third Vibrant Gujarat investment summit.

“We’ve just pulled out and dusted off this MoU,” says our Gujarat government source. Balyan is pushing hard to sort out Dahej’s storage capacity problems quickly because all four existing tanks are full to the brim - cheap D6 gas available in the market has severely dented the demand for Dahej R-LNG.

Dahej’s storage capacity problems even forced long-time customer GSPC to abandon the terminal for short-term LNG cargoes and switch loyalties to Shell and Total’s Hazira LNG terminal in July.

LNG Summit