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Don’t plan for gas based power projects, India Govt tells developers

According to reports, the Power Ministry has put out an advisory to developers to not to plan gas-based projects till 2015-16.

It said the Ministry of Petroleum and Natural Gas had indicated that NELP (new exploration licensing policy) gas production was likely to go down by 15.03 mmscmd in 2012-13 and further by 3.42 mmscmd in 2013-14. This is against the availability of 42.67 mmscmd in 2011-12.

The Ministry informed developers that the Petroleum Ministry had not given any projection for 2014-15 and 2015-16.

No additional domestic gas is likely to provided till 2015-16. Hence, developers were cautioned.

In January, Mr Anil Ambani, Group Chairman, ADAG, wrote to Prime Minister, Dr Manmohan Singh, seeking gas allocation for the group’s 2,400-MW Samalkot plant in Andhra Pradesh.

He said the plant was ready and awaiting allocation of 9.6 mmscmd gas as recommended by the Power Ministry.

Mr Ambani sought pro-rata allocation of available domestic gas to all existing and upcoming gas-based power projects. He said he understood that there were short-term supply constraints.

He said the government could consider provisioning available gas equitably to all projects on an equal PLF (plant load factor) so that each of the units could achieve minimum viability until supplies ramp-up.

The Association of Power Producers said gas price pooling alone would ensure fuel for 9,500 MW of upcoming projects.

The association includes private power producers such as Reliance Power, Tata Power, Lanco Infratech and the Adani group.

Mr Ashok Khurana, Director-General of the association, said “We reiterate the need to go by the Saumitra Chaudhauri report, which suggested averaging out of price of costlier imported LNG with domestic gas.”

Mr Khurana said the projects could run at 55-70 per cent PLF instead of being idle/stranded assets. Further, price pooling makes sense rather than one power generator alone importing and running his plant on costly fuel.

Global gas spot prices are around $14-15 mmBtu, while the domestic rate is $4.2 mmBtu.

The southern States are reeling under power shortage and this price pooling will ensure new gas plants get some fuel, Mr Khurana added.

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