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Gaz de France to bid for Enron with Indian partner

Gaz de France would find a partner to bid jointly for Enron Corp's $2.9 billion power project in India, as it is only interested in the LNG portion of the project, an official of the French utility said on Monday.

"Probably we would participate in the bidding with an Indian partner," Jacques Gautier, project director of Gaz de France, told reporters at the foundation stone laying ceremony of a LNG import terminal at the port of Dahej, Gujarat.

So far six major companies -- three foreign and three Indian -- have expressed interest in bidding for the massive 2,184 MW Dabhol plant and LNG facility located about 250 km south of Mumbai.

The bidding process for the power plant and adjacent liquefied natural gas facility is expected to start later this week.

In addition to Gaz de France, the potential foreign bidders are Royal Dutch/Shell and European oil major TotalFinaElf. The possible Indian bidders are private power utilities BSES Ltd, Tata Power Company, and Gas Authority of India.

Gautier said Gaz de France was interested only in Dabhol's LNG facility and added the firm was discussing this with the Indian lenders to the power project.

"We have no intention to enter the electricity market in India," Gautier said.

Lenders led by Industrial Development Bank of India have made it clear that they intend to sell the facility as a whole, instead of accepting separate bids for the power plant and the LNG landing jetty and storage depot.

But parties could form a consortium to bid jointly for the project and then split it up, lenders say.

Gautier said if Gaz De France were successful in bidding for the LNG facility, it would find additional customers. Currently, Dabhol Power Co, the company set up to build and operate the plant, is the sole customer for the LNG facility.

ESSENTIAL BACKGROUND

The entire Dabhol facility has lain idle since June due to a dispute over the cost of power provided to its sole customer, a nearly bankrupt state utility.

The power plant was almost complete when construction on the 1,444 MW second phase was halted after the state electricity board fell $240 million behind in payments for power provided. The 740 MW first phase began operating in May 1999.

Enron, the Houston-based energy trader which collapsed late last year, becoming the largest bankruptcy in US history, owns a 65 per cent stake in Dabhol Power Co.

General Electric Co and US-based contractor Bechtel Corp each own 10 per cent, and the Maharashtra State Electricity Board the remaining 15 per cent.

Gaz de France owns 10 per cent of Petronet LNG import terminal at Dahej. The remainder is owned by four Indian state-run oil and gas companies and Qatar's Ras Laffan Liquified Natural Gas Co.

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