Centre planning to develop 25,000 MW of gas fired plants

More gas supplies on the horizon.

Power Ministry recently gave a presentation to the PMO citing plans for new capacities of 25,000 MW

More gas supplies likely to come from RIL's D6 block and LNG capacity at Dahej and Ratnagiri

Anil Sasi

Richa Mishra

New Delhi, Feb. 14

With gas availability perking up, new power generation capacity using gas as fuel is once again finding favour.

The Power Ministry is working on plans to develop 25,000 MW of new generation capacity using gas as feedstock over the next three-four years.

After a freeze on building new capacities earlier on account of vagaries on the gas price front and supply constraints, gas is again gaining acceptance on the back of firm supplies on the horizon.

“This confidence stems from expectations of more gas coming in from the country's East Coast and additional liquefied natural gas (LNG) capacities set for commissioning,” a Power Ministry source said.

The Ministry recently gave a presentation to the Prime Minister's office citing the plans for new capacities of 25,000 MW.

Apart from expecting more gas from the Reliance-operated Krishna Godavari Basin D6 block, the policy makers are also banking on LNG capacity of 50 mscmd at Dahej and Ratnagiri, which are expected to go on stream by 2011-12. Gas from the ONGC and GSPC fields may add further to this by the Twelfth Plan.

Gas from the RIL block is currently feeding the existing gas-based and dual fired capacities. It will also feed those expected to be commissioned in the current Plan period. The block is producing 62 mscmd of gas, at present, which is likely to go up to 80 mscmd in the coming months.

The Government has already allocated 43.165 mscmd (firm and fall back basis) under its Gas Utilisation Policy from the D6 block to the power sector. Beneficiaries include NTPC (Anta/Faridabad/Dadri), Gujarat Paguthan, MahaGenco, Reliance Infrastructure Ltd, and Essar Power.

Uniform price mechanism

Besides assured gas supplies, the sector is also expecting a uniform price mechanism from various sources of gas – LNG, Krishna Godavari gas, and gas sold at administered price. The Petroleum Ministry is currently examining the prospects of developing a uniform gas price, which would make natural gas for power generation and other national priorities available at an affordable price throughout the country.

Currently, the administered price for the gas produced from Government-nominated fields has been set at about $2/mBtu, except in the North-East, where it is $1 to $1.2/mBtu. The price of gas from pre-NELP fields was approved in accordance with the production sharing contract (PSC) and range from $3.5 to $5.73/mBtu.

The price of gas from imported re-gassified liquefied natural gas (R-LNG) in respect of term contracts is over $5/mBtu. The spot price of LNG varies from time to time.

Gas from the Reliance-operated D6 block is priced at $4.2/mbtu (landfall point).