The Hindu Business Line : MSEB capacity expansion hinges on LNG supply tender

FOLLOWING the example of NTPC, the Maharashtra State Electricity Board (MSEB) has floated an LNG-supply tender for buying natural gas through international competitive bidding.

MSEB's plans to add another 440 MW to its 852-MW Uran power plant will depend on LNG bought through this tender, senior officials said.

For Maharashtra, which suffers from a power shortage of 2,100 MW during peak hours, the additional power will mean fewer power cuts; for MSEB it will mean more efficient use of its Uran asset that has been running at one-third its capacity for the last few years because of fuel shortages.

MSEB has asked for tenders before July 5, 2004, for supply of regassified or liquid natural gas in two packages of 14.6 trillion British thermal units (1 million standard cubic metres per day) per year and 43.8 Tbtu (3 mscmpd).

" To begin with, we hope to run the Uran plant at full capacity from April 2005 by tying up for 1 mscmpd natural gas supplies. The second part of the deal will require supplies of 3 mscmpd to the addition 440 MW that we plan to add by April 2007," Mr M R Ambhore, Member (Technical), told Business Line.

The combined-cycle Uran power plant has been operating at one-third its capacity for the last few years because of short supply of natural gas from ONGC Ltd's Mumbai High field.

MSEB needs roughly 3.4 million cubic metres gas for its Uran plant every day.

fficials say, although ONGC supplies have improved to 2.5-2.6 million cubic metres, there still is a shortfall of 0.8 cubic metres.

The total demand includes 1 million cubic metres for meeting the shortfall and another 3 million cubic metres after the planned capacity addition.

Officials of oil and gas companies, however, say response to MSEB's tender may not be as enthusiastic as to the NTPC tender for supplying 4 billion cubic metres of gas for its Kawas and Gandhar power projects.