GAIL raises Dabhol LNG terminal stake by swapping Ratnagiri shares with NTPC

By: |
February 24, 2021 12:20 AM

KLL owns the liquefied natural gas (LNG) assets of the Ratnagiri project, including the five million tonne per annum (MTPA) gas import and regasification terminal in Dabhol. According to sources, there was no financial transaction involved in the share swapping.

GAILThe Dabhol terminal is currently operating only during non-monsoon months, utilising only 1.9 MTPA capacity as there is no breakwater facility.

State-run energy firms NTPC and GAIL swapped their respective shares in Ratnagiri Gas and Power (RGPPL) and Konkan LNG (KLL), effectively increasing GAIL’s shareholding in KLL to 84% while NTPC’s ownership in the 1,967 mega-watt (MW) gas-based power plant rose to 86.5%.

KLL owns the liquefied natural gas (LNG) assets of the Ratnagiri project, including the five million tonne per annum (MTPA) gas import and regasification terminal in Dabhol. According to sources, there was no financial transaction involved in the share swapping.

KLL was formed to own the LNG assets at Ratnagiri after a demerger scheme for RGPPL was approved by the NCLAT in February 2018. The increase in KLL ownership is seen to increase GAIL’s operational flexibility in the gas business, in terms of sourcing, regasification and trading of LNG.

The Dabhol terminal is currently operating only during non-monsoon months, utilising only 1.9 MTPA capacity as there is no breakwater facility.

The under-construction breakwater is likely to be commissioned in mid-2022, enabling it to operate throughout the year. Currently, the LNG terminal has a total cargo capacity of 30 ships per year, which is expected to increase to 80 ships per year from FY24.

GAIL infused Rs 2,700 crore in KLL in FY20, which was used to settle the latter’s loan of Rs 3,813 crore under a debt resolution plan. This had increased GAIL’s equity shareholding in KLL from 40.92% to 69.06%.

RGPPL was set up in 2005 to take over and revive the assets of the beleaguered Dabhol power project. The plant has a power purchase agreement with Indian Railways for supply of 500 MW for five years since the start of FY18.

The plant operated at only 13.6% capacity utilisation in the April-January period. As on FY20-end, NTPC had an investment of Rs 834.6 crore in the equity shares of RGPPL.

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