The Hindu Business Line : ONGC to go it alone in Tripura power project

SPV with IL&FS and Assam Government will not be required.
ONGC to further explore the option of power generation in remote or far-flung areas.
Final decision on power project to be taken by the board at its next meeting on March 3.

Kolkata , Feb. 20

ONGC has now decided to set up the 750-MW gas-based power plant in Tripura on its own.

The special purpose vehicle ONGC Tripura Power Company Ltd, which was created in joint venture between ONGC (26 per cent), IL&FS (50 per cent) and the Assam Government (24 per cent) for setting up the Rs 2,400-crore generation project at Palatana in South Tripura will not be required.

The Rs 1,600-crore SPV for creating transmission network from Palatana to Bongaigaon in Assam, however, will continue to function.

Talking to Business Line after the company's board meeting here today the ONGC Chairman, Mr Subir Raha, said the generation project would be reflected in the company's own balance sheet. He also indicated that the company would further explore the option of power generation in remote or far-flung areas where there was a lack of demand and transportation of gas was costly.

"Evacuating gas from Tripura is more costly than evacuating electricity," Mr Raha said. "Tripura is a special case where we have proven reserves as well as idle production capacities without any demand. The power project, which will henceforth be considered as a division of the company, will help us monetise the assets in this region."

On whether the company has enough expertise to run a power generation project, he said, "We already generate over 800 MW of power at our different installations. We also sell power to Maharashtra State Electricity Board from our Uran facility and Gujarat State Electricity Board from Hazira."

The ONGC Director Finance, Mr R.S. Sharma, later said the company today presented its case for setting up the power project on its own to the board, which is expected to take a final call on the issue at its next meeting scheduled on March 3. Financing of the power project was one of the major bones of contention between Mr Raha and former Union Minister of Petroleum and Natural Gas, Mr Mani Shankar Aiyar. While the oil major was in favour of monetising the natural gas reserves available in Tripura and moving up the oil and gas value chain as well, the Ministry felt that the company should only concentrate in the core area of exploration and production. The outcome of the tussle was that the company was allowed to hold only a minority 26 per cent stake in the generation project.

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