US-based GEV offers solution for reviving stranded gas power plants

M Ramesh Chennai | Updated on January 11, 2018

Promises supply of natural gas 25% cheaper than imported LNG

US-based Global Energy Ventures (GEV) has been making a sales pitch to revive stranded gas-fired power projects and fertiliser plants.

The pitch is: sign a long-term contract, and we will supply natural gas at least 25 per cent cheaper than imported LNG.

On the face of it, it sounds ridiculous because the very reason for transporting natural gas in the form of LNG is that enormous quantities of gas can be compressed into a tiny volume of liquid — so a shipload of LNG carries a very large amount of gas, which brings down the transportation cost per unit.

One cubic metre of LNG holds 600 cubic metres of natural gas at atmospheric pressure.

However, GEV’s Country Director for India and Sri Lanka, Raj Selvendra, reasons out that while LNG is cheaper to move, it entails many other costs such as liquefaction, cryogenic containers and re-gasification.

While a shipload of CNG holds a lot less gas than LNG, it works out cheaper in the end.

For example, Selvendra says that LNG needs to be maintained at minus 160 degrees Celsius even on ships, whereas CNG would need only minus 30 degrees. Nor does it require massive liquefaction and re-gasification facilities at either ends of the supply chain.

Selvendra says plants in Tamil Nadu and Andhra Pradesh will benefit from GEV’s proposal.

He has sounded out many potential users such as SPIC, Madras Fertilizers, PPN power project, and the GMR group, on the East coast and Ratnagiri power plant (Dabhol) on the West.

He says GEV can supply 300,000 million BTU of gas per day, equivalent to 2.3 million tonnes per annum of LNG.

Is LNG passe then? No, says Selvendra, it has different applications.

“CNG targets small-to-medium sized, regional delivery projects, while LNG must be geared towards large-scale, long-haul projects.”

Asked if the potential customers are buying into his pitch, he said that the discussions had barely begun. This was confirmed by a source in a large fertiliser company.

India has 25,329 MW of gas-based power plants of which 14,305 MW are technically “stranded” — fully or partly inoperative due to want of supply of gas.

These plants are estimated to have consumed investments of ₹1.24 lakh crore — a chunk of them are non-performing assets in the books of banks.

In 2016-17, they operated at a mere 22.51 per cent plant load factor, producing 49 billion units of electricity.

GEV says it can help revive these plants.

Published on May 08, 2017

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