NTPC desperate for LNG supply

Six plants report a cumulative daily shortfall of natural gas in the range of 7-9 MMSCMD

The National Thermal Power Corporation (NTPC) is desperately seeking liquefied natural gas (LNG) supplies as six power plants run by it are reporting a cumulative daily shortfall of natural gas in the range of 7 to 9 million metric standard cubic metres per day (MMSCMD).

NTPC has already shot off letters to prospective suppliers in India and is assessing imports from Yemen, Russia and Iran.

The corporation has also invited proposals from entities that can regassify the imported LNG and also handle storage and transportation with the help of pipeline network.

Petronet LNG Ltd (PLL) has submitted its bid for storage, handling and regassification.

Prosad Dasgupta, director (Finance) of PLL, said, "We have not submitted a bid for supplying LNG as our entire stock is already sold. We've told NTPC that we would not be able to handle more than 1.5 million metric tonne (MMT) of LNG after March, 2005, but till then we will be able to handle 2.5 MMT."

This, Dasgupta said, could cater to NTPC's initial requirements.

Officials of Shell Hazira, another LNG player, were not available for comment, but sources said the company, which is coming up with its LNG terminal at Hazira near Surat, may also submit a bid "" for both supply and regassification, and storage and transportation.

Malaysian giant Petronas, which had earlier submitted a bid for supplying LNG to NTPC but was out-bid by Reliance Industries Ltd (RIL) in May this year, is also said to be contemplating bidding. NTPC has approached RIL to check if early supply of gas from the Krishna-Godavari basin is possible.

An NTPC spokesperson said RIL would be able to supply LNG only after 42 to 58 months from May this year and this is a part of the conditions laid in the bidding document.

"While we are searching for alternative resources for buying LNG, we are also going to sign the gas purchase agreement with RIL in September as the letter of intent (LoI) has already been issued," the spokesperson added.

RIL did not respond on this, despite repeated attempts made by Business Standard including through e-mails to concerned officials.

The NTPC official said the offer will close on September 1 following which one bidder will be selected for the supply of LNG, and one for regassification, storage and transportation to NTPC's power plants at Anta (Rajasthan), Auraiya (Uttar Pradesh), Kawas and Gandhar (Gujarat), Dadri (Uttar Pradesh) and Faridabad (Haryana).

"We intend to source LNG on c.i.f. basis to meet the shortfall of gas at these power stations," the NTPC spokesperson added.

NTPC's Kawas and Gandhar power plants, which will start functioning with the supply of LNG, will add 2600 mw to the corporation's capacity.