New Delhi: The Board of Directors of GAIL have approved an equity contribution of Rs500 crore in the Ratnagiri Gas and Power Private Limited (RGPPL), a company which was incorporated on the 8th of July 2005 as a 50:50 joint venture between GAIL and NTPC for taking over the assets of the Dabhol Project. The investment will be made after the approval by the 'cabinet committee on economic affairs'.

With this, both GAIL and NTPC have approved investment of Rs500 crore each as equity contribution in RGPPL, which would help in commencing the process of transferring the assets of the defunct Dabhol Power Company through the Debt Recovery Tribunal (DRT). Upon completion, RGPPL will undertake construction and commissioning activities of the power plant as well as the LNG terminal with a target to achieve completion by the second half of 2006.

As a promoter, GAIL's role will be to source the LNG required to run the power plant of RGPPL as well as for the merchant sale of RLNG. The capacity of the LNG terminal is 5 MMTPA, of which 2.1 MMTPA would be required for the Power Plant. GAIL will be developing necessary infrastructure to sell 2.9 MMTPA R-LNG in the gas-starved markets of Western India after payment of mutually agreed regasification charges to RGPPL.