Qatar on board for Dabhol’s LNG project

India is targetting LNG from RasGas’ liquefaction train-6, which does not have long-term buyers, and a small volume from train-5 for restarting the Dabhol project that has been idle since 2001.

The power plant, which is now owned by Ratnagiri Gas & Power Project Ltd, is scheduled for restart in July 2006 and requires 2.1 million tonnes per annum of LNG to become fully operational.

During the meeting on November 21, Petroleum Minister Mani Shankar Aiyar has requested al-Attiyeh to direct RasGas to communicate the volumes by December 2005 while ensuring that it is up to 2.5 MTPA which India could use as it desires.

Once RasGas ascertains the surplus volumes that could be made available to India, an Indian delegation would visit Doha for negotiating the supply terms and pricing. ‘‘RasGas delegation can then travel to India to sign the new LNG supply agreement as it will be regarded as a very important bilateral achievement,’’ said Aiyar.

As for long-term supplies, al-Attiyeh said that Qatar would not have ‘‘definite answer’’ before January 2007. He said that new buyers, including China, had been approaching even as domestic gas consumption was rising to 5,000 million standard cubic feet from earlier 800 MSCF.

Doha is very sensitive to legal and contractual obligations that Dabhol Power Company had in its sale purchase agreements with Abu Dhabi and Oman. However, India has suggested that RasGas consider supplying 2.9 MTPA of LNG for merchant sales, not power generation, so that it avoids liability on failed SPAs between Dabhol and LNG suppliers AdGas and Oman LNG.

Ratnagiri needs 5 MTPA of LNG — comprising of 2.12 MTPA for the power plant from July 2006 and 2.9 MTPA for merchant sales from September 2007. And Qatar is the only West Asian source which can meet the above requirement.