PS3-5.1

LNG RECEIVING TERMINAL AT DAHEJ, GUJARAT, INDIA

LE TERMINAL DE RECEPTION DE GNL DE DAHEJ,ETAT DU GUJARAT- INDE

Sham Sunder (Director – Technical)Man Mohan Ahuja (Senior Manager – Technical)

Petronet LNG Limited – New Delhi – 110001

Jacques Gautier (Project Director)Pierre Breban (senior Expert – LNG)

Gaz de France - France

ABSTRACT

To maintain its growth India needs more energy. Its domestic energy sources areinadequate to meet the demand. Coal and Natural Gas are likely to play very significantrole for India at-least during first half of 21st century. Coal, however, may not find favorfrom the consumers, due to problems related to infrastructure and pollution. With limitedindigenous natural gas reserves, the only available option is LNG imports. Petronet LNGLimited (PLL), with Gaz de France (GDF) as the strategic partner has been promoted byfour leading public sector undertakings of India to set up LNG receiving, terminals inIndia. PLL has done a detailed exercise to identify suitable locations in India and hasdecided to set up initially one terminal at Dahej, Gujarat followed by another terminal atKochi, Kerala. GAIL shall be the main transporter / marketer of the regasified LNG to theconsumers. PLL has executed in July 1999, a long term Sale & Purchase agreement withRas Laffan Liquefied Natural Gas Company (RasGas) of Qatar for supply of LNG onFOB basis. Shipping of LNG will be on time-charter arrangement basis. For the design ofterminal usual alternatives for various facilities are considered, but the specificity of thesite due to high tidal currents, length of trestle, deep water & characteristics of seawaterhave impacted design of marine facilities (e.g. breakwater), un-loading facilities,philosophy of vapour return to ship & design of the vapourization equipment.

RESUME

Pour maintenir son développement économique, l’Inde doit faire face à des besoins enénergie croissants alors que ses ressources énergétiques nationales sont inadéquates poursatisfaire cette demande. Le charbon et le gaz naturel sont appelés à jouer un rôle trèsimportant en Inde au moins durant la première moitié du 21ème siècle. Le charbon,cependant, ne rencontre pas la faveur des consommateurs à cause des problèmes liés auxinfrastructures et à la pollution. Les réserves indiennes de gaz naturel sont limitées etl’importation de GNL constitue la seule option possible. Petronet LNG Limited (PLL),associée à Gaz de France son « Strategic Partner », a été chargée par ses quatrepromoteurs, Sociétés Pétrolières et Gazières majeures du Secteur Public indien,d’installer des Terminaux Méthaniers en Inde. PLL, après avoir réalisé des recherches desite détaillées, a décidé de construire un premier terminal à Dahej dans l’Etat du Gujaratsuivi d’un second à Kochi dans le Kerala. Gas Authority of India Limited (GAIL) serachargé du transport du GNL regazéifié. En juillet 1999, PLL a signé en un contrat d’achatde GNL long terme avec Ras Laffan Liquefied Natural Gas Company (RasGas), Qatar,sur une base FOB. Le transport du GNL sera assuré sur la base d’un affrêtement à temps(time-charter). Pour la conception du terminal, les solutions techniques habituelles ont été

PS3-5.2

étudiées, mais les spécificités du site, telles que les courants marins élevés, la longueur dela jetée, la profondeur et les caractéristiques de l’eau de mer ont influencé la conceptiondes installations maritimes (exemple : construction d’une digue), des circuits dedéchargement du GNL ainsi que le principe du retour gaz au navire et des équipements deregaséification.

PS3-5.3

LNG RECEIVING TERMINAL AT DAHEJ, GUJARAT, INDIA

INTRODUCTION—ENERGY SUPPLY AND DEMAND

India is a large country with a population of one billion, and to provide a betterquality of life for the people the energy needs are enormous. During the last 50 years theGovernment of India through National Oil Companies has developed a reliable energyproduction and distribution system. However, energy consumption in India is growing ata faster pace but it is still much below the world average and that of developedeconomies.

Energy demand in India has seen a steady growth during the last 50 years. It hasgrown from 25 MTOE in 1950-51 to 247 MTOE in 1996-97. While energy productionhas grown at about 4 % per year, consumption has seen a growth of 5 % per year.Import dependence has increased from 12 % in 1950-51 to 22 % by 1996-97 mainly dueto the declining share of domestic production of oil where import dependence has goneup to 65%.

The Planning Commission of the Government of India has worked out futureperspective of energy demand considering the requirement of various sectors of economyas part of the Ninth Plan (1997-2002) for the country. As shown in Table 1, a high-energy demand has been projected during the next 14 to 15 years time horizon.Economic growth of 6.5 % has been projected during the period 1997-2007 and to matchthis energy consumption needs to grow at about 6.5 to 7 %. The domestic hydroelectric(hydel) and coal production capacities are also required to be maximized. Theprojections indicate energy import dependence will grow from a current level of 22% toabout 42% by the year 2010-2011.

TABLE: 1Year --------- > 2001-02 2006-07 2011-12DEMAND MTOECoal 191.36 258.56 379.30Oil 121.00 166.00 208.00Gas 59.00 78.00 103.00Hydel 8.29 11.73 16.60Nuclear 3.28 4.33 5.33

Total 382.93 518.62 712.23

DOMESTIC SUPPLY MTOECoal 166.86 224.40 300.25Oil 37.00 40.00 50.00Gas 29.00 33.00 38.66Hydel 8.29 11.73 16.60Nuclear 3.28 4.33 5.33

Total Supply 246.23 313.46 410.84Total Import 136.70 205.16 301.39Import Dependence (%) 36 40 42

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It can be seen that coal shall continue to play a dominant role in energy supplies forIndia, due to better reserves, however it’s share will decline. The share of Natural gas onthe other hand is expected to rise mainly due to environmental, ease of transportation andefficiency considerations. In table 2 below is given the sector wise Natural Gas demandin India

The demand for fertilizer, and hence demand for natural gas is increasing, but isshown constant here, because it is found that it is more economical to import fertilizeritself rather than LNG for this sector. The demand for Sponge Iron & others is shownconstant because of restrictions imposed due to availability. Table 3 below describes thepredicted demand, supply and deficit of Natural Gas in India.

TABLE: 3Natural Gas Demand, Supply & Deficit (MMSCMD)

2001-02 2006-07 2011-12Demand 102 146 204Supply 75 65 44Deficit 27 81 160

Creation Of Petronet LNG Limited

Petronet LNG Limited (PLL), an Indian company, has been promoted by four leadingpublic sector undertakings of India, viz. Gas Authority of India Limited (GAIL), Oil &Natural Gas Corporation Limited (ONGC), Indian oil Corporation Limited (IOCL) &Bharat Petroleum Corporation Limited (BPCL) to set up LNG receiving terminals inIndia. Gaz de France (GDF), which is the largest European importer of LNG and operatorof LNG regasification facilities, is the strategic partner of the PLL. The suppliers of LNG(RasGas / MOBIL-EXXON) & strategic partner (GDF) would also be taking equity in thefirst LNG terminal being set up by PLL. The association of these companies in theformation of a JV company (PLL) offers a unique advantageous position to PLL due tothe experience of these companies in different area. ONGC, for example is India’s largestexploration and production company. GAIL is the largest natural gas transmission andmarketing company in India. GAIL owns and operates a network of over 4,000 Kms ofpipeline, including the HBJ pipeline located in Northwestern India.

Indian Oil Corporation (IOC) is India’s largest commercial undertaking and is theonly Indian Company in the 1998 Fortune’s “Global 500” listing of the world’s largestIndustrial and Service companies. BPCL is the fifth largest refining and second largestmarketing company in India with facilities for refining crude oil and marketing ofpetroleum products.

TABLE: 2Sector wise Gas Demand in India (MMSCMD)

2001-02 2006-07 2011-12Power 54 98 156Fertilizer 38 38 38Sponge Iron / Others 10 10 10

TOTAL 102 146 204

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Gaz de France (GDF) is one of the world’s leading operators in natural gas industryand is skilled in both upstream and downstream sectors of the natural gas industry. Thecompany is deeply involved in liquefied natural gas, storage and distribution technologiesand has a presence in 20 countries. Association of GDF with PLL imparts the companythe technical strength and operation skills.

Sourcing of LNG

Geographically India has an excellent location advantage for receiving LNG fromMiddle East countries as well as South East Asian countries. As demonstrated in figure 1The West Coast of India is well suited to receive LNG from the Middle East, and the EastCoast from the Asia Pacific countries.

However, the price of LNG at a specific location will determine the Sale – Purchasecontract. The transportation distance from Middle East countries varies in the range of1000 to 1400 nautical miles (NM) at a coastal location in Gujarat State on the WestCoast, where as the distance of transportation from Asia Pacific countries for this locationvaries from 2700 to 3700 NM. This gives a clear advantage of lower shipping costs ofLNG on west coast from the Middle East. The LNG sources from Asia Pacific are moresuitable to supply locations in the West coast.

The large gas reserve base in Middle East countries gives a greater confidence onreliability of long term supply of LNG to India. The North field in Qatar is one of thebiggest gas field in the world and thus Qatar has a large potential for development ofthese gas reserves. Two projects, namely Rasgas and Qatargas, have demonstrated thecapabilities of the Qatar to develop these reserves in a most efficient manner. Theseprojects have a large expansion capacity for adding more LNG trains and therefore thelinkage for Petronet projects at Dahej and Cochin has been considered. With thesecapabilities Qatar can become one of the largest suppliers of LNG to India. Iran and

Figure: 1Figure: 1SOURCES OF LNG SUPPLY FOR INDIAN MARKETSOURCES OF LNG SUPPLY FOR INDIAN MARKET

Darwin

Gorgon

Bal Haf

Ras Laffan

Qualhat

TangguhMLNG Tiga

Dahej

Cochin

Delhi

I N D I A

A U S T R A L I A

1700 Nm

1300 Nm

Das Island

l3050 NM

l2400 NM

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Yemen also holds large untapped gas reserves and can be a potential gas supplier to Indiain future.

PLL has executed in July 1999, a long term Sale & Purchase agreement with RasLaffan Liquefied Natural Gas Company (RasGas) of Qatar for supply of LNG on FOBbasis, to meet requirements of LNG for its terminals

Selection of the Location:

PLL has done a detailed study to identify the suitable locations in India, havingpotential markets for the gas in the vicinity. It is found that Dahej is a strategic locationwhere many public / private sector companies like GCPTCL, IPCL & Indo-Gulf havedeveloped port facilities. In fact the IPCL jetty is already in operation since 1998 yearsand the Indo – Gulf jetty has started during 1999. The presences of these facilities offerthe advantage of sharing various port related facilities. There is significant market for thegas in the vicinity of Dahej. Moreover HBJ pipeline, which supplies gas to variousconsumers in the state of Gujarat, Rajashthan, Utter Pradesh, MP, Haryana and Delhi, isclose to Dahej. The import of LNG around Dahej is found to be most economicalconsidering the location of the gas consumers. Figure 2 provides information aboutrelative location of the HBJ pipeline and Dahej, where as in figure 3 provided is theindicative information regarding possible consumers in the vicinity of Dhej. Besides thenew users for natural gas in this area, there are various existing users, which are eitherusing liquid feed stock and are ready to switch over to natural gas or are under utilizeddue to less availability of fuel.

Figure: 2

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Figure: 3

The Project site is located in the Gulf of Khambhat, in the Bharuch district of GujaratState. This Gulf connects several major Indian rivers to the north-east part of the ArabianSea. The site is on a flat band of sandy soils lying between the river Narnada (to thesouth) and the river Mahi (to the North), on the east coast of the Gulf (see figure 4 below)

Figure : 4

The bathymetry near Dahej is rather specific. A very flat beach is first encountered,with the slope being less than 1/160 in the inter-tidal area, than at approximately 1700

PS3-5.8

meters from the coastline, the bathymetry suddenly increases, assuming a significantslope (1/20). Further offshore, a rather flat bottom is encountered. The port has huge tidalvariation of approximately 10 meter and the tidal currents at the site are significantlystrong. These currents could go as high as 3 m/s at flood and 2 m/s at ebb tide. Theminimum draft of 14 meters required for the selected size of LNG carriers is available ata distance of approximately 2.5 Km from the shoreline. As mentioned above the site islocated between the two river mouths. These rivers bring large quantities of sediment tothe Gulf waters. If a protected berth in shallow water is considered Around 4 meters ofsedimentation (after monsoon) in the berth is expected every year, calling for extensivemaintenance dredging. The main objective here is to provide a berthing facility to un-loadLNG all around the year, with minimum down time. As the safety of the un-loadingoperation is the key factor for LNG import terminal, extensive studies were made fordesign of safe berthing facilities. To avoid huge cost on maintenance dredging deep waterjetty about 2.5 Km away from the shore with C shaped breakwater is considered. It hasbeen found that current conditions are also critical for design of breakwater than waveconditions as for as operational downtime is considered. The design of C shapedbreakwater would protect the LNG jetty from southerly waves and partially from theflood currents. Ebb currents would also get reduced. The breakwater shall provide asignificant reduction in the mooring and berthing forces and its situation as an island willavoid sedimentation or erosion of the shoreline. (see figure 5)

The studies have confirmed that the LNG tankers can safely gain access to the berthat Dahej and un-load LNG in the sheltered area all around the year, without need of anyexpensive channel.

Figure: 5

.

PS3-5.9

Main Characteristics of the LNG Import Terminal

The conceptual flow scheme of the terminal is described in Figure 6 below:

Figure: 6

The main characteristics of the terminal designed for receiving initially 5.0 MMTPAof LNG, with a provision to expand the capacity to 10.0 MMTPA are as follows:

Tankers and Jetty

The port and jetty facilities shall be designed for 80,000 to 140,000 m3 LNG carriers.For the design of jetty facilities the most constraining LNG carrier (membrane or sphere)will be taken into account. The basic design, has the following features:

a: The breakwater,

The breakwater, as described earlier is to shelter the LNG berth from waves andcurrents. It is approximately 660 meter long on crest and is founded on depth varyingbetween –21 m CD and –14 m CD. Three options have been considered for thebreakwater, namely:

- Rubble mounded with stone armour- Rubble mounded with accropode armour- Caisson type

Owing to the uncertainties of the availability of large rocks required for the rockarmour rubble mound breakwater stone armour has not been considered. Due to lack ofexperience and local construction capabilities, caisson type has also not been selected forthe FEED package, although it has been left as an option for the EPC contractor. A rubblemound breakwater with Accropode block armour has been selected for the basic design.

b: The piled Structure & Approach trestle,

The most common type of piling used by the local construction companies is bored-cast-in-situ type of piles. Due to these reasons it has been decided to construct cast-in-situtype of piles for the inter-tidal zone. However for the deep sea zone driven steel piles

PS3-5.10

have been considered owing to difficulties in constructing cast-in-situ type of piles.Approach trestle, to connect the jetty head to the shore, is approximately 2.4 Km long.The width of approach trestle is about 10 meters, with widening at every 200 meters foraccommodating the pipeline expansion loops. Additionally about five passing bays areconsidered for vehicular traffic.

c: Breasting & Mooring Dolphins.

Based on the mooring study there are five mooring dolphins and four breastingdolphins. A 1.8 m wide steel walkway has been considered to connect the mooringdolphins and breasting dolphins. The main un-loading platform is a two level structureoptimized to house all the facilities related to un-loading and berthing of the LNGcarriers.

Un-Loading Facilities

The un-loading facilities broadly comprise of the following:

Description Number & Size

LNG Un-loading arms 3 (16” X 75’)NG loading arm 1 (16” X 75’)Un-loading lines 2 X 30”

During the feasibility stage, only three LNG un-loading arms and two LNG un-loading lines were considered. No vapour loading arm and hence vapour return line wasconsidered assuming that the Vapouriser on LNG carrier will meet the necessaryrequirement. This design was adopted in view of the very long jetty. However duringFEED preparation, based on input from the ship operators it was found that most of theLNG carriers have vapour generation facilities, only for the emergency situation and theydo not prefer the idea of using these facilities on continuous basis. Based on this feedbackit was considered to provide a vapour return line along with associated NG loading arm.However, in order to increase the reliability and have minimum cost facilities it wasconsidered to draw these vapours down stream of BOG compressor (resulting in reducedsize of vapour return line) instead of conventional design where these vapours are drawnup-stream of BOG compressor.

LNG Storage Tanks

The storage capacity at the terminal has been selected based on,

• The size of LNG carrier & un-loaded capacity

• The send-out flow rate

• The delay of the LNG carrier due to weather conditions.

The estimated requirement is of two storage tanks with a net capacity of 148,000-m3for Phase – I, when send out rate is corresponding to 5.0 MMTPA. During phase II whenthe send-out rate is increased to 10.0 MMTPA one additional tank of same capacity shallbe required.

The type of tank for the terminal has been selected based on safety analysis toevaluate the effect of a major LNG spillage due to an accident on a storage tank The

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specific scenario of accident was chosen for each type of tank, as recommended in theEuropean Standard EN 1473 (see table 4)

Table: 4

Type of Tank Scenario ConsideredSingle Containment tank Collapse of the tank, spillage of the

whole capacity in the impoundingbasin

Double containment tank Collapse of the tank roof, the LNGremains in the secondary concretecontainer but evaporates

Full containment tank No collapse is considered

The result of risk analysis indicated that an accident on the single containment typemight greatly damage the LNG terminal installations, including the adjacent tank. It alsoleads to unacceptable safety distances around the plant site. Accident on doublecontainment tank will also have major effects (although significantly less than singlecontainment tank) due to extensive vapour cloud reaching out of plant battery limit. Forthe full containment tank, the concrete roof can withstand an external impact withoutcollapse and the secondary container is able to contain the LNG. The scenario thereforeconsidered is the discharge of cold natural gas from the safety valves on the top of tank.At the safety valve elevation, the maximum distance to the lower flammable limit (LFL)threshold is around 55 meters, which is well within the plant battery limit.

In such a case, lightning is the only ignition source, even if extremely rare. Themaximum radiation flux at ground elevation, in case of fire, is only 2.2 kW/m2.

On the basis of above analysis full containment type of tank has been selected for theLNG terminal. It will give PLL, a full reliability of the terminal in a long-termperspective, with adequate level of protection similar to any modern LNG terminal.Petronet has selected conventional configuration of the full containment tank (i.e. 9% Niinner tank and pre-stressed concrete outer tank).

Boil Off Gas Handling

Since there is no consumer requiring low-pressure gas, the boil off gases from thetanks is compressed and re-condensed by contact with sub-cooled LNG in the re-condenser, which is sized for handling maximum vapours during all the operating modes.During ship un-loading case a part of the compressed boil off gases are returned to theship as required based on the un-loading rate (figure 6 above).

LNG Regasification:

LNG from the tanks is pumped out with the help of in-tank pump and than high-pressure pumps pump it to the required pressure (approximately 93 bar). The pressure of93 bars is selected based on the operating pressure in HBJ pipeline at the joining point(Near Vagodia in Gujarat). For vapourization of high pressure LNG following optionswere evaluated (capex + opex):

PS3-5.12

1. Open Rack Vapourisers (ORVs)

2. Submerged Combustion Vapourisers (SCVs)

3. Shell & Tube Vapourisers + SCVs

The use of conventional Open Rack Vapourizers has not been considered on accountof long trestle, high tide range & bad quality of seawater. The seawater in Dahej areacontains about 1000 to 3500 mg/l of suspended solids and 0.13 mg/l of copper ions, asagainst acceptable levels of 30 mg/l of suspended solids and 0.002 mg/l of copper ions. Itis feared that such high-suspended solids will cause erosion of the ORV panels and thehigh copper ion concentration would result in high corrosion rate for the aluminum partsof the ORV. Manufacturers of the ORV were approached for a possibility of painting theORV panels with an erosion & corrosion resistant paint. It was indicated by themanufacturers of these ORVs that, if such a painting is considered, the maintenance ofpainting is expected to be made every 6 months for a period of 2 or 3 days.

The SCVs were also not preferred on account of economics and environmentalconsiderations.

The selected scheme comprises:

• Vertical shell & tube vapourizers (STV) with a closed loop hating medium,which is heated by ambient air.

• Submerged combustion vaporizers (SCV) as additional capacity in case of lowambient air temperature.

The terminal is equipped with a captive power plant (CPP) comprising of at-least twogas turbine generators. A closed loop of warm water from the co-generation heatexchangers feeds the SCVs. The provision of NG firing is kept as redundancy or foremergency purposes.

The shell and tube vapourizers considered shall be TEMA type NEN or NJN design,with process fluid in the tube side and heating medium on the shell side. The heatingmedium could be a 36% glycol-water mixture or a 22% methanol-water mixture. Thisheating medium has been chosen to prevent freezing inside the exchanger and to ensurehigh heat transfer rate. The ambient air in-turn heats the return glycol-water mixture.(Figure 7 below):

PS3-5.13

Figure: 7

It is this aspect, which needs special attention in case of Dahej terminal, because ofvariation in the ambient air temperature. The issues involved are to achieve the requiredduty at very low ambient air temperatures (the ambient air temperature at Dahej could belower than 10oC), to avoid cold air re-circulation and to avoid fog generation duringhumid and cold whether.

Detailed investigations were carried out to verify the performance of air heaters andto determine the frequency of appearance of plume / fog (due to contact of ambient airwith cold surface) depending upon the time of year and time of the day. It was observedthat taking air humidity into account improves air heater performance, due to heatreleased by condensing vapours, however efficient means of condensed water removalare required to prevent carry-over of water with the flowing air and than causing plume /fog. The simplest & most efficient solution for minimizing cold air re-circulation was toplace different units not parallel to each other, as the re-circulation problem was predictedmainly due to influence of streams coming from parallel units. Placing of theses unitsperpendicular to each other or in a staggered manner considerably reduced the problem ofcold air re-circulation.

The other facilities, such as metering, utilities etc. being similar to any conventionalLNG terminal are not described in this paper

PROJECT EXECUTION METHODOLOGY

Petronet LNG selected Gaz de France as its strategic partner in November 1997. Thusbegan a close co-operation whereby the skills and expertise of the PLL’s promotingcompanies & GDF were pooled for the benefit of the project. The success of such aproject relies heavily on the quality of basic engineering and bidding package. It isprecisely in this area where Petronet / GDF partner ship has played a decisive role.

A joint Task Force of Petronet & GDF had issued the Request for Proposal, Receivedthe offers and are about to select the EPC contractor.

Petronet LNG Limited (PLL) is going to execute this project by awarding a lump sumEngineering Procurement & Construction Contract. A dedicated Project Monitoring

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Team (PMT) of PLL shall monitor the execution of the project, with the assistance fromProject Management consultant (PMC). The PMC shall assist and advise PMT in allmatters relating to execution of the project. The lenders for the project financing requirethat the initial responsibility of operation and maintenance (O & M) of the LNG terminalshall be entrusted to a company with sufficient experience in operation of LNG receivingand re-gasification terminal. Therefore PLL is considering awarding the initial operationand maintenance of the terminal to an experienced company in this area. The O & Mcontractor will be carrying out operation and maintenance of the terminal for initialperiod and later on it will be taken over by PLL.

CONCLUSION

An analysis of the information presented above including specificity of the siteindicates that all the major attributes of a project of this type are present in the case ofDahej Project.

• A market comprising existing and new consumers.

• An identified LNG supplier: RasGas, with all the experience of Owning andoperating liquefaction plant in Qatar, with full support from the state of Qatarhaving proven gas fields allocated to it.

• An existing onshore transmission system, via the HBJ pipeline and marinefacilities (yet to be developed).

• Existence of components of LNG chain: A number of installations (developmentof which otherwise become an obstacle in the development of a LNG project) arealready existing (e.g. Ras Laffan port and plant in the upstream and HBJ pipeline& existing power plants and other industries in the down stream). In fact anumber of consumers are already existing. Over commitment of gas supply havebeen made from the existing net work.

Thus nothing is more favorable to the development of this project than thiscombination of seller (RasGas) who is having all the experience of Owning and operatingliquefaction plant and understands the difficulties inherent to the Indian market and thebuyer (PLL) who has succeeded in organizing this project in spite of difficultiesstemming both from the competitive environment and intrinsic project conditions. All thetechnical challenges because of site-specific conditions such as high tidal currents, lengthof trestle, deep water & characteristics of seawater have been appropriately addressed.

Petronet LNG Limited, with all the support from the sponsoring companies andGovernment of India is fully committed to this project and thanks to this spirit of mutualunderstanding between the different parties and the excellent relationship between thestate of Qatar and India, would like to see the first LNG cargo un-loaded at Dahej portahead of schedule (i.e., end 2003).