“We will decide on giving the LNG terminal on tolling basis in one or two months…Maybe by July,” said A K Ahuja, managing director of Ratnagiri Gas and Power Private Limited (Ratnagiri Gas and Power).
Ratnagiri Gas and Power does not require the terminal as the government has already assigned natural gas from RIL’s Bay of Bengal KG-D6 fields to fire the 2,150-megawatt power plant.
“Since there is no breakwater, only one million tonne capacity will be available for leasing in 2009-10,” Ahuja said.
Ratnagiri Gas and Power would earn INR1.4 billion yearly in tolling fee, which is expected to be around $0.60 per million British thermal unit of import fuel.
“Our operation cost is around Rs 120 crore, so we will make Rs 20 crore of profit on import of one million tonne of LNG. When import goes up, our profits will also rise as the operations cost will remain around the same,” another company official said.
Ahuja said the commissioning of the LNG receipt and regassification terminal has been postponed to October 2009 as choppy conditions at sea make it hard for the ships to dock at the port during the monsoons beginning mid-May 2009 to September 2009.
In the absence of a breakwater, port operations are shut down and so “we will now try to commission the terminal in early October”, Ahuja said.
Ratnagiri Gas and Power presently obtains regasified LNG under a 5.8 mmcmd supply agreement with Petronet. However, the company takes only 2.8 mmcmd because of persistent equipment problems at the power plant. The contract with Petronet is set to expire in September 2009 after which it will begin receiving gas from KG-D6.
The commissioning of the terminal was primary planned for April 2009 and then postponed to early May 2009. Ratnagiri Gas and Power may take help from Shipping Corporation of India (SCI) to offer port service operations at Ratnagiri in Maharashtra.
Ahuja said Ratnagiri Gas and Power would perform an agreement to this effect before commissioning the LNG terminal.
