GAIL looking at Algeria, Nigeria for long term LNG deals

New Delhi -- State-owned GAIL (India) Ltd is looking at Algeria and Nigeria for clinching long-term liquefied natural gas (LNG) supply deals for its Ratnagiri terminal, which is to be commissioned by mid 2007.

"We are in negotiations with both Algeria and Nigeria for long-term deals of 2.5 million tonnes of LNG each, with supplies beginning from 2009," company sources said Friday.

Till long term supplies become available, GAIL will use regassified LNG supplied by Petronet LNG from Dahej terminal in Gujarat to fuel the power plant of its joint venture Ratnagiri Gas and Power Pvt Ltd (formerly Dabhol Power Company).

A joint venture of state-owned energy majors including GAIL and Petronet LNG is expected to soon finalise a short-term contract with Qatar's RasGas for supply of 1.2 million tonnes LNG.

Regassified LNG from Dahej is to be transported to Ratnagiri via a new Dahej-Uran-Ratnagiri pipeline under construction by GAIL.

The pipeline is scheduled to be made operational by March 2007, when the gas will help to revive the 2,140 MW power plant, which has been shut for several years -- except for two months this year from May-June when one of the three units was made operational using holding stock of naphtha fuel.

"The regassified LNG to be supplied by Petronet LNG will help us generate around 1,000 MW of power," official sources said.

Encouraged by the successful trade of LNG bought in global spot markets, where small gas quantities are sold to highest bidder, and sold in domestic market after regassification at Dahej, GAIL is now looking at using its own facility at Ratnagiri for regassification and sale of around 2.9 million tonnes of spot cargoes.