India’s largest power generator, NTPC, has appealed to the Centre for allocation of 47 million standard cubic metres a day (mscmd) of domestic gas to expand power generation capacity at its existing gas-based plants by 8,400 Mw. Currently, NTPC has a gas-based generation capacity of 5,895 Mw at Anta (413 Mw), Auraiya (652 Mw), Kawas (645 Mw), Dadri (817 Mw), Gandhar (648 Mw), Faridabad (430 Mw) and Kayamkulam (350 Mw from gas as well as naphtha). The biggest gas plant is run in a joint venture with other companies at Ratnagiri, with 1,940 Mw of power generation capacity.
The requested allocation of 47 mscmd is in addition to the 12 mscmd required for the expansion of generation capacity at Kawas and Gandhar by 1,300 Mw each. The expansion of these two plants has been stuck due to NTPC’s legal battle against Reliance Industries over the rate of the KG-D6 gas supply.
NTPC has proposed expansion of Anta by 1,050 Mw, Auraiya (1,400 Mw), Dadri (700 Mw) and Faridabad (1,050 Mw). NTPC also proposes to expand the Ratnagiri plant (which is a joint venture between NTPC, GAIL India, MSEB Holding and Indian financial institutions and banks) by 2,100 Mw. In addition to this, the company, after disbanding its Badarpur plant, will develop a 2,100-Mw gas-based project.
An NTPC official, who did not want to be identified, told Business Standard: “The company can complete the proposed expansion in three years, once the gas allocation is made by the petroleum ministry. We expect the Central Electricity Authority to examine our case and recommend it to the power ministry, which will in turn suggest it to the petroleum ministry. The gas allocation can be from both administered price mechanism (APM) gas as well as from RIL’s KG-D6 field.”
APM gas is priced at $5-6 per million British thermal unit (mBtu), while the delivery price of KG-D6 gas at NTPC’s plants is $7 per mBtu. In the case of Kayamkulam’s expansion, NTPC has entered into a 20-year contract for the supply of re-gasified liquefied natural gas (RLNG) at $16-17 per mBtu.
The official further informed that, during 2009-10, NTPC received 13.88 mscmd of gas. In the current financial year, it has got 15.5 mscmd till date.
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A Mumbai-based analyst said NTPC’s plea for the allocation of domestic gas comes at a time when the company has opposed the Centre’s proposal on pooling of gas price. NTPC argued that, with the continuous reduction in supply of APM gas, the pooling of price with spot LNG would expose the power sector to the highly volatile prices of gas.
Existing gas-based power stations would be at a disadvantage vis-à-vis new stations due to their old technology and lower efficiency, or higher heat rate. Further, there would be no incentive for LNG imports.