Bettiah power project â€کgift' to Pandey

Vol 13, PW 21 (08 Apr 10) Midstream & Downstream

Uncertainty haunts GAIL plans to enter the power generation business with a proposed 206-MW gas-fired power station in the former British colonial stronghold at Bettiah in Bihar.

According to a sheepish GAIL source, the power project is being set up in Bettiah solely because it is the birthplace of former oil secretary RS Pandey! “He must have suggested the idea (during his term as oil secretary) to our chairman,” says this source. “How could we refuse him” In public GAIL says it is targeting the power generation business to address the increasing gap between Indian electricity demand and supply.

PETROWATCH learns a Detailed Feasibility Report for the proposed Bettiah gas-fired power station, which GAIL plans to set up with Delhi-based fertiliser cooperative IFFCO, was submitted by Kolkata-based consultant Development Consultants in January this year. Media reports claim GAIL has firm plans to set up the Bettiah power station and another gas-fired station in Maharashtra, but GAIL sources say its plans are not so clear.

“Things are very fluid,” says one GAIL source. “We have not decided whether to sign a long-term Power Purchase Agreement (PPA) or set up Bettiah as a ‘merchant’ power station and sell power on a spot basis to the highest bidder.

It could be a mix of both. A final decision has yet to be taken.

” Also uncertain is gas availability for the proposed project. GAIL wants to supply gas to Bettiah from its proposed 2050-km gas transmission pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, passing through Bihar.

In January, Tractebel was appointed PMC for the pipeline and GAIL hopes to lay the first 1410-km stretch to Bihar by December 2011. But gas supplies through the Jagdishpur to Haldia pipeline are heavily dependent on Reliance’s upcoming pipeline from Kakinada in Andhra Pradesh to Basudevpur in Orissa on which, we hear, work has begun.

GAIL says it asked the oil ministry for a gas allocation for its proposed Bettiah power project last year (2009).