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Economic Evaluation of LNG Terminal at Dahej, Gujarat

Economic Evaluation of LNG Terminal
2003 Economic Evaluation of LNG Terminal Energy

The Scope

The Petronet LNG Limited with the objective to import the natural gas from Qatar and regasification it for supply to final consumers in Uran Area in Maharashtra, Gujarat and North India through HJB Pipeline set up a LNG Terminal at Dahej. The project was initially funded through short term loans. In order to replace the short term funding by raising long terms loans from the market Asian Development Bank was requested by Petronet to extend the credit guarantee for its long terms loan as well as participate in the equity. We were contracted to do the economic analysis for the project by revalidating the demand assessment, identification and evaluation of incremental and non-incremental economic benefits of the LNG Terminal, estimation of economic price of the imported gas, estimation of project’s economic output and risk analysis.

Our Role

A team of experienced Energy Economists was deployed by us for carrying out economic analysis and compilation of economic evaluation report. We started with reviewing all the project related documents and project financial analysis as well as had discussion with the Petronet officials followed by the collection of data to estimate the economic costs and benefits. Economic price of imported gas was analyzed by calculating the SERF/SCF based on the applicable import and export duties. Incremental and non-incremental economic benefits were estimated for various categories of consumers and economic internal rate of return was calculated. Further the work extended to risk analysis by using @RISK software module and a distribution analysis was done to assess the economic benefits accruing to various stakeholders.