Dabhol plant to start power generation using GAIL gas

24 July 2007

Mumbai: The Ratnagiri Gas and Power Pvt Ltd the firm that owns the beleaguered Dabhol power plant in Maharashtra, is all set to start generating electricity using gas as feedstock from the middle of August.

Power generation will start once RGPPL provides guarantees for payment for the fuel to be supplied by GAIL India, an equal promoter in Ratnagiri Gas and Power Pvt Ltd.

GAIL transported first ever gas to the plant through a newly built 577-km pipeline from Dahej in Gujarat to the Dabhol plant on July 10 but RGPPL could not take gas supplies as the promoters have not sorted out fuel payment issues.

>"The agreements are being signed today and gas supplies (to the power plant) will begin in a day or two," GAIL chairman and managing director UD Choubey said.

>GAIL withheld gas supplies pending RGPPL furnishing a letter of credit (a sort of payment guarantee) of Rs33 crore. RGPPL, in turn, could not furnish the LC as it had not signed a power purchase agreement with its sole customer Maharashtra State Electricity Board.

>MESB again had to wait for approval from the state government and said LCs are being opened now after receiving government clearance.

>The 740-MW Phase-II plant is expected to start generation in about two weeks time while a similar capacity Phase-III plant would be connected to gas after eight weeks.

The 670-MW Block-I will start generation from December 15.

>Petronet LNG Ltd is importing liquiified natural gas (LNG) from RasGas of Qatar in gas tankers to its Dahej terminal which is then re-gassified and transported through GAIL''s pipeline to the power project.