State-run power producer NTPC Ltd has decided to go ahead with a Rs 2,600-crore tender for expansion of its gas-based Kawas project in Gujarat. Once the tender is finalised, it will strengthen the corporation's case for getting a gas allocation from the government.
NTPC plans to expand the capacity of its existing 656 Mw combined cycle plant at Kawas in Gujarat. The expansion capacity will be 1,300 Mw and the company is likely to finance the project through external commercial borrowings and internal resources.
The PSU wants to place the order for equipment before securing fuel linkage as this would avoid any delay in expansion of the power projects. A company official said it can have in-principle approval for fuel linkage and go ahead with the projects even as its legal battle with Reliance Industries Ltd for gas from the Krishna-Godavari D6 block goes on.
"We have approached the government about our target of 4,700 Mw of gas projects in the 12th Plan. We have asked for gas at whatever price is fixed by the government. The ongoing legal case (with RIL) can be decided later," Chairman and Managing Director Arup Roy Choudhury had told Business Standard in an interview recently.
NTPC had sought environmental clearance for expansion of the Kawas and Gandhar power project last year. The Board of the company had approved the feasibility report and NTPC had earlier planned to come out with a tender for both projects.
The company is planning a gas-based capacity addition of 6,000 Mw of its existing power stations at Kawas and Gandhar (Gujarat), Auraiya and Dadri in Uttar Pradesh and Kayamkulam in Kerala. For capacity addition of this magnitude, it requires 30 million standard cubic metres of gas per day (mscmd). One mscmd is needed for firing a 200 Mw gas-based power project. At present, NTPC has seven gas-based stations in different parts of the country.
The company is still embroiled in a legal tussle with Reliance Industries over the supply of gas from the KG basin’s D6 block. RIL in 2004 had bid for an NTPC tender to supply 12 mscmd gas to the state utility for expansion of its Kawas and Gandhar plants.. However, the tender was not implemented and NTPC decided to file a case in 2005. This is currently pending in the Mumbai high court.
The government has already made a distinction between the privately-run Reliance Natural Resources Ltd (RNRL) and the government-run NTPC Ltd with regard to gas dispute with Reliance Industries Ltd (RIL). In the past, the power ministry and NTPC asked the ministry of petroleum and natural gas to push NTPC’s case with the EGoM, headed by the finance minister.
The Supreme Court on May 7 ruled in favour of the government determined price of $4.2 per million British thermal unit (mBtu) for the case between RIL and RNRL but did not make any comment on the NTPC dispute.
