The Hindu Business Line : Gujarat eyes country's `energy hub' status

CLOSE on the heels of Gujarat's claim to being anointed the `petrocapital' of India, thanks to the two LNG regassification plants at Dahej and Hazira supplementing its natural gas resource, the State is eyeing another sobriquet - `energy hub' of the country.

It feels such a label is justified, as on the anvil are firm plans to commence construction of at least six power plants over the next one year, aggregating 6,800 MW.

What is more, the cost is slated to be cheaper by over Rs 3,100 crore due to the customs duty waivers that feature prominently among the mega power project benefits. While the six projects would have together cost Rs 24,480 crore at Rs 3.6 crore per MW minus the mega power status, the duty waivers and other sops would roll the cost back to Rs 21,350 crore at Rs 3.14 crore per MW.

A large chunk of these projects has the National Thermal Power Corporation (NTPC) as a major player, its total exposure pegged at 3,600 MW. This, despite the recent decision to downsize the long pending 2,000 MW Pipavav power project to 1,000 MW.

Also, the revised project would have the Gujarat Power Corporation Ltd (GPCL) as a 50:50 joint venture partner with NTPC.

According to a senior State Government official, the pre-feasibility report as to whether the power project would be fuelled by piped natural gas or imported coal would be ready by September.

"There are several options before us. The state-owned Gujarat State Petronet Ltd (GSPL) plans to extend its gas transmission pipeline to Pipavav in the next two years. Also, the NTPC is getting the Krishna-Godavari gas brought in by Reliance Industries till its Gandhar complex and one could always think of a line extension. Or, it could be imported coal, if other logistics bear out," he said.

The NTPC is fast proceeding with the Kawas and Gandhar power projects of 1,300 MW each for which the Reliance Industries has been awarded the tender for supply of natural gas at $2.97 per million British thermal units. Much would depend upon the costing at which NTPC is able haul gas over some 1,400 km from the eastern coast to the western coast.

The one other corporate entity that is set to play a major role in the forthcoming power sector forays in the State would be the Torrent group, which is setting up a 1,050 MW power plant near Surat at a cost of Rs 3,300 crore. The Torrent group was the original promoter of the 655 MW power plant at Paguthan, where the current owner, China Light, is now planning to erect another 1,000 MW plant rather than doubling the capacity as originally conceived.

Clearly, these independent power producers (IPPs) are betting heavily on the gas - both natural and regassified LNG - that is expected to be freely available in Gujarat in the coming days.

The one exception to this rule is the Essar group, which is planning a 1,200 MW with refinery residue as fuel at its Vadinar refinery site.

The company, currently considering the option of buying an eight-year-old power plant in Scotland and shipping it to India, is awaiting the due diligence of the plant in a week.