DPC'S LNG TERMINAL

Gail may rope in Amarchand & Mangaldas

Anupama Airy

New Delhi, Dec 10: Gas Authority of India (Gail) is in talks with the country’s leading legal firm Amarchand & Mangaldas for appointing them as legal consultants for studying the buy-out prospects of Dabhol Power Company’s (DPC’s) LNG import terminal in Maharashtra.

Senior petroleum ministry officials said Gail will shortly enter into a confidentiality agreement with DPC and start the due diligence exercise for acquiring the latter’s LNG import terminal.

After carrying out the due-diligence of the project, Gail will submit a joint bid along with the Tata’s for acquiring the LNG terminal project of DPC. Tata Power has already submitted a bid for buying the troubled power project of DPC.

“Joining hands with Tata’s for the LNG terminal makes sense as the two companies along with TotalfinaElf of France were earlier joint venture partners in the Rs 2,400-crore Indigas LNG terminal project in Maharashtra. As that project has now been scrapped, Gail and Tata’s have decided to go together for the Dabhol’s LNG import terminal”, sources said.

When contacted, Gail chairman and managing director Prashanto Banerjee said the corporation has also been given a formal go ahead by the petroleum ministry for bidding for the LNG terminal of DPC.

“Till now we were talking to IDBI in this regard. However, after the Centre’s approval we will soon begin talks with DPC directly,” Mr Banerjee added.

While international consultant KPMG has already been appointed as financial consultants for advising Gail on matters related to taxation and finance, the corporation is also close to appointing a technical consultant.

Sources disclosed that earlier Gail was considering Bechtel as the technical consultant for the project, but considering that it is one of the stakeholders in the Dabhol project, the corporation is scouting for a leading international firm which can be given the job of a technical consultant.

It may be recalled that the IDBI-led FIs, in their road-map for revival of the $3-billion project, had recommended that Gail should takeover Enron’s LNG import and re-gassification facilities in Maharashtra as part of the revival package.

In addition to Gail, two other multi-national oil and gas companies - British Gas and Shell, and Gas Authority of India Ltd, have also expressed their interest in acquiring the 5.5-million tonne LNG terminal of the troubled DPC.

DPC had set up the 5.5-million tonne LNG terminal to supply LNG for power generation at its 2,184 MW plant. While data on individual investments in the Dabhol power plant and LNG terminal are not available, industry observers say the total investment in the LNG terminal is estimated to be between Rs 2,500-3,000 crore.

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