Dahej terminal receives first LNG import

The terminal is also the first in a developing nation, putting India in an elite club that trades in LNG. This option was chosen because India’s previous initiative of transporting the fuel through cheaper pipeline mode has been stuck for nearly a decade.

New Delhi is opposed to building a pipeline from gas-rich Iran or Turkmenistan because it would have to cross through Pakistan. A pipeline through deep sea is costly and technologically challenging. The Dahej terminal has been built at a cost of $550 million with equity funding of 12.5 per cent each from ONGC, BPCL, IOC and Gail (India). French firm Gaz de France has 10 per cent equity while Asian Development Bank (ADB) has 5.2 per cent. The remaining 34.8 per cent equity is being offered to the public through an initial public offer of 261 million shares on February 19.

While dedicating the terminal to the nation, Petroleum Minister Ram Naik said that the Gujarat government would also be given five per cent equity for which approval would be sought from Sebi. Earlier in the inaugural, Gujarat Chief Minister Narendra Modi had requested for a share for his government in the project.

Re-gasified LNG from Dahej will be distributed to consumers in Gujarat, Madhya Pradesh, Uttar Pradesh, Rajasthan, Haryana and Delhi through the HBJ pipeline. A separate pipeline is being constructed by Gail to move the gas to consumers in Maharashtra by the year-end.

Naik said the terminal would help shift country’s focus from liquid hydrocarbons to natural gas, an environment friendly and a cheaper alternative. The re-gasified LNG will replace nearly 20 per cent of liquid fuels saving the country $2 billion in foreign exchange outgo. To that end, Petronet plans to double plant capacity to 10 million tonnes at an estimated cost of $130 million. It plans to rope in its LNG supplier RasGas as a shareholder in the proposed expansion.