Business Daily from THE HINDU group of publications
Saturday, May 26, 2007
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Business Daily from THE HINDU group of publications Saturday, May 26, 2007 ePaper |
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Alliances & Joint Ventures NTPC inks energy pact with Nigeria Our Bureau
Bullish on deals NTPC would get access to at least 3 mtpa of LNG on a long-term basis for fuelling its projects in India. The company has been facing a severe shortage of fuel for operating its gas-based stations.
New Delhi May 25 NTPC Ltd has signed an energy co-operation pact with the Nigerian Government, under which the State-owned power major would get access to at least three million tonnes per annum (mtpa) of liquefied natural gas (LNG) on a long-term basis for fuelling its projects in India, besides getting assistance in participation in the bidding for gas block in the African nation. According to the agreement, NTPC would, in turn, set up and operate a 500 MW coal-fired power plant and a 700 MW gas-based power plant in Nigeria on its own or through a joint venture. The company shall also assist Nigeria utilities in rehabilitation, renovation and modernisation of its power stations and also help in developing and upgrading existing training facilities.
Gas Reserves
NTPC officials did not give an estimate of the price at which LNG would be bought under the pact, but a statement from the company said it would get LNG at a "reasonable price." The memorandum of understanding for energy co-operation was signed between NTPC and Nigeria's Ministry of Energy on May 22. Nigeria's has estimated natural gas reserves of approximately 104 trillion cubic feet — the tenth largest reserves in the world. NTPC officials said that the African nation is in the process of establishing a mega LNG project, which could be utilised for bringing LNG to India. The LNG project in Nigeria's Bonny Island, with equity participation from State-run Nigerian National Petroleum Corporation and Shell Gas B.V., consists of a five-train liquefaction plant, transmission pipelines, a loading terminal and storage tanks.
Gas-swap Deals
The facility, which has a total LNG production capacity of over 17 mtpa at present, is being expanded further and is likely to have a capacity of around 22 mtpa by the end of 2007. Buyers of LNG from the facility include Italy, Spain, Turkey, France and Portugal, with one of the biggest customers being the Italian electric power utility ENEL, industry players said. NTPC, which is facing a severe shortage of fuel for operating its gas-based stations, has been on the lookout for gas-swap deals in several regions, including the West Asian markets. The company is bullish on tying up deals in West Asia on the same lines as the Nigeria pact. The company is currently buying gas from the spot market through a limited tendering route at between $10.5 and $12 per mmBtu to tide over short-term supply constraints.
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