To foray into various elements of LNG value chain

Anil Sasi

Looking ahead

Plans LNG

foray to ensure supplies for gas-based power stations.


invest $11 million in Arunachal Pradesh block bagged in NELP V bidding.

The power

utility plans to become a 66,000-MW plus company by 2017.

New Delhi, March 17

Having bagged its first oil and gas block in the fifth round of bidding under the New Exploration Licensing Policy, NTPC Ltd plans to take forward its diversification into the oil and gas exploration business with aggressive plans to bid for more acreage in domestic blocks under the recently announced sixth round of bidding under NELP-VI.

The power major, which plans to pick up equity stakes in the upstream LNG chain in India and abroad to ensure the long-term availability and price competitiveness of gas or LNG for its gas-based power stations, would be bidding for gas blocks in the sixth round of NELP to take forward its gas exploration plans, Government officials said.

The state-owned company, the country's largest power producer, is also working towards getting into various elements of the LNG value chain in the medium to long term. This includes possible participation in gas liquefaction and regassification terminals and LNG shipping through the joint venture route, Government officials said.

NTPC, which in a three-way joint venture bagged its first oil and gas block during the last round of bidding (NELP-V), is planning an initial investment of $11 million for developing this block, officials involved in the exercise said.

While NTPC, on its own, could be investing up to $11 million over the next four years as initial investments in developing the block in Arunachal Pradesh, its consortium partners Canoro Resources Ltd and GeoPetrol International would chip in with the rest of the initial investments. NTPC has a 40 per cent stake in the venture formed by the three players. The block would be developed in three phases over a seven-year period.

NTPC plans to extract oil from the block to sell it in the spot markets and use the revenue stream to purchase gas for its plants. "The extraction cost of oil is only around $3-$5 per barrel. With crude prices soaring in the international spot markets and expected to remain high, we can profit from the difference and use the funds for purchasing gas for our plants," an official said.

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(This article was published in the Business Line print edition dated March 18, 2006)
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