NTPC spread delays hit Petronet Kochi project

The proposed liquified natural gas (LNG) project of Petronet LNG Ltd (PLL) in Kochi is in a standstill as the National Thermal Power Corporation (NTPC), which is considered to be a prosperous power purchaser from the project, is yet to hike capacity at its Kayamkulam power plant.

PLL, not finding any other bulk prospective buyer in Kerala, has decided to focus on its Dahej project in Gujarat till NTPC comes out with a fresh plan.

PLL is a consortium of domestic oil and gas majors. The company is ready to commission the country's first LNG terminal at Dahej on February 9.

"We are ready from our side to come up with the proposed 2.5 million metric tonne per annum (MMTPA) LNG terminal at Kochi which is now running beyond schedule. The future of this project depends a lot on NTPC's plan. The project cost is estimated to be Rs 2,000 crore which will be fully borne by PLL on a debt and equity basis. We will go ahead with the project as and when NTPC hikes its capacity to 2,300 mw from 350 mw at present," said P Dasgupta, director (finance), PLL, on Tuesday.

PLL has all the clearances from the concerned government organisations including the letter of interest from the Kerala Maritime Board and the clearance from the Union ministry of environment and forests.

PLL has also signed a long-time agreement with the Ras Gas of Qatar to supply 2.5 MMTPA of LNG for its Kochi plant, once it is ready and commissioned.

NTPC officials could not be reached for comments, which evolves the future of the country's third (The Royal Dutch/Shell Group coming up with another LNG project in Hazira of Gujarat) proposed LNG project.

Sources said a feasibility study on the Kayamkulam project is over.

"The project feasibility report is now lying with the Central Electricity Authority (CEA). Once it gets the final nod, NTPC will be able to save money on power generation cost as against using naphtha. Once the LNG terminal is ready, the expanded NTPC plant will use LNG for power generation which will bring down the cost per unit by at least 35 per cent," said an industry source.

During the second half of last year, NTPC had shortlisted six firms including PLL for supply of LNG to its Kayamkulam project.

"But the matter came to a standstill after the pre-biding process," said the source.

It may be noted that during November last year, a top level meeting took place at Thiruvananthapuram to sort out issues related to NTPC's expansion plan.

The meeting was attended by Kerala chief minister A K Antony and top officials of NTPC, PLL and Gas Authority of India.

But no conclusive decisions were taken at the meeting.

Sebi nod for IPO soon

Petronet LNG Ltd (PLL), which received the Bombay Stock Exchange's (BSE) approval for its initial public offering (IPO) on Tuesday, expects to get the approval of the Securities and Exchange Board of India (Sebi) on Wednesday.

According to P Dasgupta, director (Finance), PLL, "We expect to get Sebi's observation on Wednesday and also approval from the National Securities Depository Ltd."

PLL is planning to issue 26.10 crore shares which will be listed both on the BSE and the National Stock Exchange.