British Gas Plc subsidiary Gujarat Gas Company (GGCL) will soon sign an agreement with Essar Power to supply natural gas by end-July. The two have already signed a memorandum of understanding.
A K Srivastava, managing director, Essar Power, said, "We may sign the agreement by July-end." GGCL will have to tie up with customers before August as gas from Cairn Energy will start flowing from August. GGCL has recently entered into a deal with Cairn Energy to buy an additional 1.27 million cubic metre per day (mcmd) of gas from August.
The natural gas from GGCL will be used to produce 300 MW of power at Essar Power's 515 MW power plant at Hazira in Gujarat. Essar Power supplies 215 MW of power to the group's steel plant while the remaining 300 MW is sold to Gujarat Electricity Board (GEB). Essar Power, at present, uses naphtha as fuel to fire its power plant.
Robert W Thomas, managing director of GGCL, confirmed that the company has signed a memorandum of understanding (MoU) with Essar Power to supply one million cubic metre of gas per day.
He pointed out that GGCL was also looking at other bulk customers to supply natural gas. On the gas supply front, GGCL is also exploring tie-ups with other gas suppliers, he added. Thomas was speaking to newspersons at an analyst meet here today.
Thomas said, "GGCL was primarily focusing on large bulk customers located around the Hazira corridor. Later on, we may consider second level of customers." These customers will be supplied natural gas from Lakshmi offshore oil and gas field.
GGCL is also planning to more than double its gas transmission and distribution volume by next year.
