The Hindu Business Line : MMTC in talks with NTPC for power project

THE power generation business, which has seen a drying up of investments over the last decade, is starting to witness a new category of first-time investors.

State-run trading house MMTC plans to set up a Rs 4,000-crore gas-based power project in Orissa.

This comes close on the heels of Oil and Natural Gas Corporation's plans to foray into power generation by setting up a 750-MW wellhead-based gas station in Tripura.

"With some of the SEBs (State electricity boards) beginning to prune the losses in their balance sheets and trading of power picking up in volume terms, domestic companies are rushing to fill in the void left by foreign investors, who pulled out of the power generation business citing lack of viability of the sector as a whole," an industry player said.

According to sources involved in the exercise, MMTC is in talks with the country's biggest power generator — National Thermal Power Corporation (NTPC) — for jointly setting up a 1,000-MW power station in Orissa.

MMTC, which in its heydays was the sole canalising agent for a large number of imported items, has roped in Crisil Advisory Services as consultants for the deal.

The company has also bagged a power-trading licence and also plans to set up a liquefied natural gas (LNG) facility at Paradip.

It is proposed that the plant will use gas as fuel from the proposed LNG facility at Paradip, which is also being set up in collaboration with NTPC, sources said.

The estimated cost of the 5-million tonne LNG facility at Paradip will be around Rs 2,500 crore.

According to industry players, the emergence of power trading as a commercial activity has encouraged newer players to look at investing in the sector as a viable option, since the option of selling power to a variety of buyers becomes a reality.

ONGC has already set up a special purpose vehicle named Tripura Power Development Company Pvt Ltd for developing the station near one of its gas fields that is currently not in use commercially.

The state-owned petroleum major has also signed up IL&FS to advise it on the new venture, and the responsibility for the offtake of the power generated by the project has been entrusted to the state-owned power utility PTC India Ltd.

According to sources, the company is bullish on developing more wellhead power stations at gas fields where transportation of gas is not economical.

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