Gail, BPCL eye Ratnagiri LNG terminal

MUMBAI: Gas Authority of India (Gail) and Bharat Petroleum Corporation of India (BPCL) are likely to bid for leasing Ratnagiri Gas & Power’s (RGPPL) liquefied natural gas (LNG) terminal. An RGPPL executive, who did not wish to be named, said two more state-run companies have shown interest in participating the bidding process, taking the number of interested firms to 10.

Eight companies including Indian Oil, National Thermal Power Corporation, Reliance Industries, Reliance Natural Resources, Essar Oil and GMR have already submitted expressions of interest (EoI) for the project.

“Most likely, we would call an open bid for the project early next year,” managing director of RGPPL, AK Ahuja told ET. Gail, which holds nearly 30% stake in Ratnagiri Gas, was willing to use the terminal but later withdrew as the government decided to lease it out to generate funds for the financially-starved company.

By leasing out the gas terminal, Ratnagiri Gas, formerly known as Dabhol Power Company, is expected to earn around Rs 150 crore a year from the terminal whose capacity is expected to go up to 5 million tonne after two years. The company’s LNG terminal is expected to be commissioned in February with an initial capacity of 1.1 million tonnes per annum (mpta). The capacity will go up to 2.7 mpta by the end of 2010 and 5 mpta by 2011.

According to Mr Ahuja, the company has awarded the dredging work to Gammon India. “Mechanical commissioning of the terminal is almost done. Now, the breakwater facility needs to be developed. It will increase handling capacity.” Break water facility protects cargo ships from sea waves.

Ratnagiri Gas has spent Rs 3,000 crore on the terminal and will chip in another Rs 600 crore to develop break water facility. While its main promoters, NTPC and GAIL, had financed the investment so far, its other promoters such as Maharashtra government and a host of financial institutions including ICICI will bring in fund for the remaining development work.