The Hindu Business Line : Bidadi gas supply bidders told to match NTPC stations' terms

GAS supply bidders for the 1,400-MW Bidadi gas power station have been asked to match the supply terms extended to the Gandhar and Kawas stations of National Thermal Power Corporation Ltd.

Sources said the Karnataka Power Corporation Ltd (KPCL), the lead promoter for the Bidadi power station, had held one round of discussions with three short-listed consortiums for gas supply.

The three short-listed consortiums are Petronet LNG, along with Gas Authority of India Ltd, IOC, along with Petronas of Malaysia, and Reliance Industries Ltd (RIL).

KPCL is the State Government-owned power generation company, with interests in hydel and thermal power generation. It currently has a thermal-generating capacity of about 1,470 MW in the State and 2,880 MW of hydel capacity.

The corporation is now preparing to diversify into gas-based power station.

The technical bids were completed last year and the request for proposal is due to be invited shortly.

According to the sources, all the suppliers were told that the price bids for the Gandhar and Kawas contracts would be the benchmark for the 15-year fuel supply contract for Bidadi.

For the 648-MW Gandhar and the 645-MW Kawas, RIL had emerged as the lowest bidder, quoting a delivery point tariff of $2.97 per million British thermal units (MMBTU).

Inclusive of duties and local taxes, the final delivered tariff is estimated to be the equivalent of about $3.26 per MMBTU.

KPCL's Bidadi station is expected to require at least 1.4 million tonnes of gas for the project, assuming a plant load factor of 85 per cent.

KPCL had initially benchmarked the tariff to around $4.3 per MMBTU.

But after the NTPC bids had been opened, KPCL scaled down the benchmark tariff.

The sources said the new benchmark would help KPCL bring down the power tariffs.

At the new benchmark, the fuel cost alone translated into about 50 paise per kilowatt-hour assuming current exchange rates. (This is assuming 0.0034 MMBTU = one kWh.)

KPCL's target for a levellised tariff is near about Rs 2.50 a unit.

This tariff had been arrived at based on the levellised tariffs of some of its new thermal plants, including the Central and State-owned generating stations.

So far, none of the fuel supply bidders has indicated a tariff for the project.

This was because of the differential costs and sources of supply involved. IOC is expected to source the gas from Malaysia, where it would be liquefied and transported to an Eastern coast regassification terminal located at Krishnapatnam in Andhra Pradesh.

Petronet LNG is already sourcing the gas from Qatar's Ras Laffan Liquefied Natural Gas Company Ltd (RasGas). Petronet's present tariff for some of its fertiliser customers is in the region of about $3.5 per MMBTU.

Reliance is expected to supply the gas from the Krishna-Godavari Basin.

It has offered a firm supply equivalent to about 10 million standard cubic metres a year.

Reliance, however, has not indicated its tariff, though expectations are that it is likely to be in the same region as the bids supplied to NTPC.