The Hindu Business Line : Haldia Petro to invest Rs 70 cr in power venture

HPL Cogeneration produces about 70 MW of captive power — against a nameplate capacity of 116 MW — and steam, using naphtha as feedstock which is supplied by HPL.

Pratim Ranjan Bose

Kolkata, Aug. 18 Having acquired the captive power joint venture — HPL Cogeneration Ltd (HPLCL) — in May this year, Haldia Petrochemicals Ltd (HPL) is planning a Rs 70-crore investment in the power plant to reduce the energy bill.

The project is estimated to improve HPL’s bottomline by Rs 155 crore a year by reducing the use of high-cost naphtha with petrochemicals gas (known as refinery fuel gas) and several low-cost petrochemical by-products as feedstock to produce power.

While the two-part project will be implemented over a period of 12-15 months, sources say, part of the benefits of the project may start reflecting in the HPL balance sheet beginning this fiscal. The pay-back period of the investment is estimated to be less than six months.

According to sources in the State government controlling the Haldia Petrochemical management, the company may rope in GE Infrastructure and Doosan Babcock Energy (formerly Mitsui Babcock) in implementing the projects.

Joint venture

HPLCL was previously a 51:49 joint venture between L&T and Haldia Petrochemicals. In May this year, HPL acquired L&T’s stake in the joint venture in a cash deal of Rs 180 crore. Accordingly, HPLCL is now a wholly owned subsidiary of Haldia Petrochemicals Ltd.

HPLCL produces approximately 70 MW of captive power — against a nameplate capacity of 116 MW — and steam, using naphtha as feedstock. Naphtha is supplied by HPL.

Considering that HPL is a standalone naphtha-based petrochemicals producer, sourcing the feedstock from the market, the arrangement always proved costly to HPL. HPLCL, however, went on making profits as HPL could not depend on the unstable grid power and was bound to use the costly captive power.

Cheaper energy

Having acquired the captive power producer, HPL, therefore, immediately drew up plans to part replace the intake of naphtha by cheaper captive energy sources.

Accordingly, the company now plans to implement a Rs 45-crore project to feed turbines with fuel gas (RFG) produced during the manufacturing of petrochemical products. HPL currently produces 7 tonnes of gas per hour, which will increase to 8.8 tonnes once the ongoing capacity expansion project is completed in the third quarter of this fiscal.

This will be followed by a Rs 25-crore project to use cheaper by-products produced by the naphtha cracker in the auxiliary turbine.

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