India: New GAIL Subsidiary to Double Capacity of Dabhol LNG Terminal

The newly-created arm of state-run gas major Gail India, Konkan LNG, will pump in around Rs. 3,000-crore to double the capacity at its liquefied natural gas (LNG) terminal at Dabhol in the Konkan region of Maharashtra to 10 million tonnes (mt) over the next three years. Konkan LNG, a 100 per cent subsidiary of GAIL, had on March 30 received the first 1.2 lakh tonne shipment of the 5.8-mt LNG contracted from the first-ever long-term agreement with the US signed way back in 2011 and 2013.

“We will be investing around Rs. 3,000-crore in Dabhol terminal to increase its capacity to 10-mt from the present 5-mt, which is also underutilised now due to the terminal not being an all-weather facility. So, to make the Dabhol terminal an all-season facility, first we will invest around Rs. 700-crore to complete the abandoned and semi-finished breakwater. Rest of the investment will go into capacity expansion,” informed Mr. B. C. Tripathi, GAIL’s Chairman and Managing Director.

GAIL created Konkan LNG recently after demerging it from Ratnagiri Gas & Power, which is a three-way joint venture it has with NTPC and Maharashtra SEB. The JV was created to run Dabhol Power which was abandoned by Enron Corporation early 2000 following its global bankruptcy. The entire project will take around three years to complete, and will be executed by Konkan LNG, Mr. Tripathi said, adding the work on the breakwater should be begin shortly. Currently the terminal can operate only about eight months in a year due to not having a breakwater.

“We’ve finalised the tender for the breakwater which will be floated very soon and hope to begin work before the monsoons at the earliest or soon after the monsoons,” said Oil Minister Mr. Dharmendra Pradhan.

The company will get 22-24 shipments per annum till the breakwater is built. Once that is done the annual intake will be 80-90 ships. The under-construction breakwater at the Dabhol terminal, was created in FY07 by the original Dabhol power plant promoter Enron Corporation.