Power, oil ministries cross swords over Neepco project

The snapping of gas supplies to the North Eastern Electric Power Corporation's (Neepco's) power plant in Tripura has become a source of contention between the petroleum and power ministries.

Senior officials told Business Standard that Power Secretary RV Shahi had written to SC Tripathi, his counterpart in the petroleum ministry, over the issue. The power ministry wants gas supplies to be restored to the project, which is coming up in western Tripura.

The petroleum ministry is the nodal agency for allocating natural gas to various consumers in the country. Sources said the ministry had asked GAIL India Ltd to write to Neepco asking why its linkage should not be canceled. The reason cited was the slow progress of the project.

Initially, Neepco's Monarchak gas-based project was to have a capacity of 500 mega watts. But this was scaled down to 280 mega watts owing to the limited quantity of gas.

Though Neepco had demanded 2 million standard cubic metre per day (mmscmd ) of gas, GAIL had agreed to supply 1 mmscmd of gas under the deal signed in September 2004.

Neepco has completed pre-project activities and the plant is estimated to cost Rs 977 crore.

Oil and Natural Gas Corporation (ONGC) has meanwhile gone ahead with its announcement of a gas-based power plant in Tripura.

It has tied-up with Infrastructure Leasing and Financial Services (IL&FS) and the Tripura Power Development Corporation for the project.

The ONGC plant is planned to come up next to the Neepco's Monarchak plant.

Officials in the power ministry have questioned the wisdom of canceling Neepco's gas supply when the ONGC joint venture has not even been registered.

ONGC plans to set up a 750 mega watts co-generation waste heat recovery plant at an estimated cost of Rs 3,500 crore.