GAIL to invest Rs 500 cr in Dabhol SPV

State-run Gail (India) Ltd on Friday approved Rs 500 crore (Rs 5 billion) investment in Ratnagiri Gas and Power Pvt Ltd, the special purpose vehicle created to restart Dabhol power plant in Ratnagiri, Maharashtra.

The board of directors of the gas utility approved the equity contribution of Rs 500 crore in RGPPL, Gail said.

RGPPL, incorporated earlier this month, is a 50:50 joint venture between Gail and National Thermal Power Corporation set up for taking over the assets of the Dabhol plant.

The investment will be made after the approval by cabinet committee on economic affairs, it said.

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NTPC has already approved an investment of Rs 500 crore in RGPPL. The process of transfer of assets through the debt recovery tribunal route would be started, it said, adding

after completion of this transfer, RGPPL will undertake construction and commissioning activities of the power plant and the LNG terminal with a target of completion by the second half of 2006.

GAIL would source the LNG required to run the power plant while NTPC would operate the plant and negotiate the power purchase agreement with Maharashtra electricity utilities.

The gas monolith has also stepped up efforts to source LNG from Qatar, Iran, Oman, Abu Dhabi, Malaysia, Indonesia, Australia, Brunei, Egypt and Algeria.

The company would complete the remaining works of the LNG terminal and also operate it. The terminal will have a capacity of 5 mmtpa, of which 2.1 mmtpa would be required for the Dabhol plant. The remaining LNG could be sold to other power companies.