NTPC seen as right customer for spare Granosa gas

Vol 12, PW 16 (15 Jan 09) Midstream & Downstream

Shell’s purported margin on the sale of gas to NTPC from the Granosa cargo may seem high to some, but maybe not to NTPC, India’s largest state-owned power generation company.

PETROWATCH learns the reason is simple. NTPC needs gas to fire its plants and 30m cubic metres of the 80m cubic metres brought to India by Granosa are likely to be still available.

On January 7, NTPC issued its latest â€کlimited’ tender to gas suppliers seeking 6m to 7m cm/d to fire six of its gas-based power plants: Kawas and Gandhar in Gujarat; Faridabad and Dadri in Haryana; and Anta and Auriya in Rajasthan. Companies were asked to submit bids by January 13, five days later than the original date of January 8.

Industry observers say the reason for the postponed bid could be in anticipation of a bid by Shell. NTPC, we are told, has become a laughing stock in the gas industry for repeatedly issuing gas tenders and coming up short so that its power plants rarely run at anything approaching full capacity.

“NTPC thought someone would offer them gas by the latest tender deadline,â€‌ says a source with a gas marketing company, laughing. “But they never get the needed supplies and everyone wonders why they keep coming to the market each month.

â€‌ But with the Petronet-LNG terminal at Dahej shut for five days to January 12 for expansion, the remnants of the Granosa cargo, we hear, have a narrow window to meet the NTPC tender - especially with dwindling domestic gas supplies. “Dahej coming back on line brings 23m cm/d to 24m cm/d back to the market,â€‌ we hear.

“But most of that is already tied-up or contracted.â€‌ Longer term, gas customers in India could be in for good news: observers reckon global LNG prices will stay within a range of $9/mmbtu to $10/mmbtu for the next two months.

“This is just a forecast based on near-term price movements,â€‌ we hear.