The Hindu Business Line : Global, domestic majors bid for Kochi LNG terminal

GLOBAL energy majors, Shell, Gaz de France (GDF) and Petronas, and domestic companies, ONGC, Petronet LNG Ltd and GAIL (India), are in the fray for supplying liquefied natural gas (LNG) to National Thermal Power Corporation's proposed capacity expansion at the Kayamkulam unit.

"These companies are among the eight firms, which have put in technical bids," Mr R.V. Shahi, Secretary, Ministry of Power, told Business Line here, on the sidelines of a press conference here.

The technical bids will be opened on July 21, before inviting the price bids, Mr Shahi said. The successful bidder for supplying gas to NTPC Kayamkulam will set up the proposed LNG terminal at Kochi.

NTPC is planning to generate an additional 1,950 MW of electricity at the Kayamkulam unit by using LNG. The unit has an existing capacity to produce 350 MW of electricity, half of which is bought by Tamil Nadu.

The Kayamkulam unit currently uses naphtha to generate power, leading to high cost of electricity for the end users.

Mr Shahi said the Kochi LNG Terminal, which will have a minimum of 2.5 million tonne capacity, would entail an investment of Rs 1,600-1,700 crore. "It will not be viable (to have a terminal) at a capacity lower than that," Mr Shahi said.

NTPC would be investing close to Rs 7,000 crore for the capacity augmentation at the Kayamkulam plant. Mr Shahi said NTPC could sell power at affordable rates of about Rs 2.30 per unit if the company manages to get LNG at competitive rates, and hence finding buyers for the electricity would not be an issue.

Earlier, speaking a the press conference, the Union Minister for Power, Mr P.M. Sayeed, said the process of setting up the LNG Terminal would be expedited so that work on the project can commence during September-October.

He ruled out any uncertainty over the project because of an alleged dispute between NTPC and PLL. "There is no contradiction or dispute between them. Petronet is also participating in this tender," he pointed out.

Mr Sayeed said the LNG Terminal at Kochi can have more than 2.5 million tonne capacity as whichever company setting it up is free to sell the gas to users other than NTPC.