The much-awaited gas for the beleaguered Dabhol power plant in Maharashtra will be delivered at a price of $5.84 per mBtu, translating to a generating cost of Rs 2.80 per unit from June this year.
The cost of gas and power generation was arrived at after the Empowered Group of Ministers allowed Petronet LNG Ltd to pool price of its cheaper Qatar LNG with expensive spot cargoes being imported for the power plant, which is now owned by National Thermal Power Corporation-GAIL joint venture Rantagiri Gas and Power Private Ltd.
Government sources said the EGoM on Wednesday approved a pooling mechanism, under which Petronet's existing customers for five million British thermal unit (mBtu) tonnes of LNG will have to pay $1.25 per million more so that Dabhol power plant can generate electricity at Rs 2.80 per unit.
Petronet LNG Ltd currently supplies five million tonnes of LNG bought from RasGas of Qatar at a delivered price of $4.60 per mBtu.
The Qatar supplies, which began in 2004, are priced at $2.79 (ex-ship), while the spot purchases are in the range of $7 to $8 per mBtu.
Sources said this pooling mechanism has not only made imported LNG affordable for the Dabhol plant, but also made LNG competitive with expected supplies from K-G basin field. Petronet will import 1.5 million tonnes of LNG in 24 spot cargoes -- two cargoes a month -- beginning June this year.
The EGoM approved a fixed cost of Rs 0.93 per unit and a variable cost of Rs 1.81 per unit based on a gas price of $5.84 per mBtu.
Petronet will bring the LNG at its Dahej terminal in Gujarat and from there take it to the Dabhol plant through a pipeline network. While the Dahej-Uran pipeline is ready, the Uran-Dabhol pipeline would be ready by May this year.
