Petronet likely to award LNG jetty contract next month

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Petronet LNG expects to award contracts for the second LNG jetty at Dahej in Gujarat next month.

The new jetty will enhance PLL's capacity by approximately five million tonnes per annum (mtpa). Nearly one fourth of the expanded capacity is slated to be offered to the State Government-controlled Gujarat State Petroleum Corporation (GSPC) for firm (third party) access.

"We are expecting the award of the contracts (for project construction) to be over next month. The jetty will be operational in two-and-a-half years from the award of contracts," the PLL Chairman-cum-Managing Director, Prasad Dasgupta, told Business Line. The company currently has a nameplate capacity of 10 mtpa. According to available reports, the capacity expansion would cost approximately USD 200 million (around Rs 1,000 crore).

"We will offer 1.25 million tonnes capacity (equivalent to approximately 19 LNG cargoes of 65,000 tonnes each) to GSPC (the nodal agency on behalf of the State Government)," he added.

According to State Government sources, PLL had entered into heads of agreement with GSPC for such access earlier this year followed by a recent understanding with the State Government.

Sources say that a firm access, if offered, would enable GSPC to tie-up LNG cargoes in phases and bring them for clearance at the PLL terminal at Dahej.

In a parallel project, GSPC, in joint venture with the Adani group, is setting up a 7.5 mtpa LNG terminal at Mundra, also in Gujarat.

According to Mr Dasgupta, as per a recent agreement with the Gujarat Government, PLL has allowed GSPC to bring one LNG cargo a month, subject to availability of terminal space. Alternatively, GSPC may buy equivalent amount of R-LNG from Petronet on spot basis.

GSPC has so far brought three cargoes at Dahej through such limited access arrangement. "GSPC was offered such access to Dahej terminal as part of a quid pro quo arrangement with the State Government. As per the arrangement, the State Government has allotted PLL 50 ha of land at Dahej for setting up the proposed gas based power plant," Dasgupta said.

According to him, PLL has paid Rs 42 crore as cost of the land allotted for the proposed 1200 MW power project. "We are expecting to seek final board approval for the project in its next meeting," he said.

While technical details are not known, available information suggests that the project may cost Rs 3,500 crore.

Taken from Business Line