The Hindu Business Line : NTPC nearing long-term pact with Nigeria

3-pronged strategy
In the short-term, NTPC has offered to maintain existing power plants
In the medium to long-term, building of gas-based power plants
The third phase involves training personnel in India

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Hyderabad Feb. 6 NTPC is close to clinching a long-term engagement with Nigeria in building the African nation's power sector while securing gas supplies in return, the Chairman and Managing Director, Mr T. Sankaralingam, said.

Consequent to the presentation made by NTPC to the President of Nigeria, the African nation has sent a firm proposal. A draft memorandum of understanding, prepared in coordination with the Ministry of External Affairs, has been forwarded to the Nigerian Government.

"By the end of February 2007, we expect to see the final agreement in place. NTPC's involvement in the Nigerian power sector would primarily be with the intention of gaining gas supply contracts for its stations here," Mr Sankaralingam told Business Line in an interview here.

Three phased foray

The Nigerian foray would be three-phased. In the short-term, NTPC has offered to maintain existing power plants. A concrete proposal made was to refurbish and maintain a 120-MW power plant, which has been shut down.

In the medium to long-term, building of 700-MW gas-based power plants and depending on coal reserves, setting up of 500-MW coal-based power plant have also been proposed in the agreement, he said.

The third phase involves training personnel in India and helping in creating the necessary infrastructure in Nigeria in their power sector. In return, NTPC expects to benefit through the supply of LNG.

Global foray

Explaining the global foray of NTPC, Mr Sankarlingam said it was based on a three-pronged strategy: Enter the power business by investing in power plants, with the rider that such investments will in return result in fuel and energy security to India. The second area is acquiring coalfields, securing rights to access gas, invest in LNG terminal, so that it could bring gas back to the country.

The third stage would be to acquire a power plant or gain coal rights, provide consultancy services or execute EPC contracts either alone or through joint ventures.

"We have already made headway in this global pursuit with progress on two projects. In Sri Lanka, NTPC has formed a joint venture with the Sri Lankan Electricity Authority to set up two 2x250 MW, coal-based power plants," he said.

The Power Purchase Agreement is expected to be signed by March-end. The plants would be based on imported coal. The options being explored are Indonesia and Australia, depending on the transportation costs. The project would be completed by 2011 and the cost would be Rs 4-4.5 crore per MW, he said.

The second foray where NTPC is on solid footing is the Nigerian initiative. The power major has also kicked off the process of scouting for oil and gas exploration blocks abroad, with plans being firmed up to pick up stake in Egypt and Australia.

For coal rights, the company is looking at Indonesia, Australia and South Africa. Though nothing was concrete, a dialogue with Australia in an advanced stage, he added.

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