The proposal to hive off the terminal is being considered by the government to check cost and time over-runs in completing the terminal.
"It will not help the project, the LNG terminal was part of the project when it was being built," Power Minister Sushilkumar Shinde said.
Ratnagiri Gas and Power, the GAIL-NTPC JV that owns the Dabhol plant, on taking over the plant last year, had estimated the cost for completing 15 per cent of the balance work on the 2.5 million tonne LNG import and regassification terminal at Rs 710 crore (Rs 7.10 billion).
However, the terminal needs an additional Rs 1,000 crore (Rs 10 billion), plus the transfer cost of Rs 1,790 crore (Rs 17.90 billion), which take the remaining total spend to about Rs 3,500 crore (Rs 35 billion), which is nearly what a new 7.5 million tonne LNG plant would cost.
Cabinet Secretary B K Chaturvedi at a meeting last month had observed the terminal may be sold to Petronet LNG, which would also be responsible for sourcing natural gas.