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Tuesday, Nov 02, 2004

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MSEB plans fresh tender to buy gas

Archana Chaudhary

Mumbai , Nov. 1

PLAGUED by a growing deficit in power demand and supply in the State, the Maharashtra State Electricity Board plans to call for a second round of tenders for buying regassified or liquefied natural gas through international competitive bidding.

The board has increased its demand to 6.4 million standard cubic metres a day from 4 mmscmpd.

Fresh tenders will floated by month-end, a senior MSEB official said. The board has appointed Crisil as advisors for the tender.

The MSEB had in June called for responses from LNG suppliers to supply natural gas in two packages of 14.6 Trillion British thermal units (1 million metric standard cubic metres per day) per year and 43.8 Tbtu (3mmscmpd). Only three companies had responded to this tender and Reliance, the only indigenous gas producer, had kept away from the tender.

"We decided to call for a tender to buy a higher quantity as demand for power has been high in the last few months. We will also need gas to set up new capacity. And gas is the only fuel, other than hydroelectric plants, that can keep generation costs at reasonable levels," the official said.

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.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's Mumbai High field.

MSEB needs roughly 3.4 million cubic metres gas daily for its Uran plant. Officials 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.

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