NTPC to tie up with IOC for new power plant

The National Thermal Power Corporation (NTPC) has entered into talks with Indian Oil Corporation (IOC) for setting up a joint venture power generation company.

The new company will run on the fuel supplied by IOC. Details of the project are still being worked out, the sources said.

The project is part of the NTPC's effort to build power plants with alternative fuel, such as gas or oil, so as to reduce its dependence on coal as primary fuel.

The reason behind a JV with IOC is to reduce the uncertainty with regards to the availability of fuel when the plant become operational.

Sources close to the development at NTPC said, "NTPC is likely to hold a majority stake in the company. The parties had entered into talks a month back."

NTPC has lined up a number of expansion plans in the next few years and a JV could be a possibility with any of these units that were being proposed to be set up.

Meanwhile, NTPC has also entered into talks with Nuclear Power Corporation of India (NPCIL) for setting up a nuclear power plant as part of its plan to reduce dependence on thermal coal. NTPC is also likely to take up equity in one of the new projects by NPCIL.

NPCIL is currently working on eight projects at four sites and will generate close to 7,000 MW by 2007-08, more than double its current capacity.

NTPC is also scouting for gas overseas to ensure continuous supplies for its gas-based plants. It is considering the possibility of importing gas in liquefied form and then re-gassifying in India. The power major now needs gas for its combined cycle power plants at Anta (Rajasthan), Auraiya (UP) and Kayamkulam (Kverala).

NTPC has already mandated Reliance Industries for the 1300 MW each power plants in Kawas and Gandhar in Gujarat.

Reliance will supply 13 million standard cubic metre gas per day from its offshore finds near the Andhra Pradesh coast.

NTPC is eyeing 2 million tonne of LNG or natural gas at a price less than $3 per MMBTU for its proposed 1960 MW Kayamkulam plant.