More problems for Anil's Samalkot expansion

Vol 14, PW 26 (30 Jun 11) Midstream & Downstream

Anil Ambani’s inability to source gas to fire the proposed 2400-MW expansion of his 220-MW power station at Samalkot in Andhra Pradesh is not his only headache.

PETROWATCH learns the Central Electricity Authority (CEA) regulator visited Samalkot in May this year and discovered that Anil-controlled Reliance Power had made hardly any arrangements to transmit electricity from the proposed expansion. Reliance Power plans to add at least 1500-MW of additional electricity generation capacity to Samalkot by February 2012 for which it needs 3.2m cm/d of gas.

But, according to a report prepared by the CEA on June 3, 2011, it is highly unlikely Reliance can set up the necessary power lines to transmit 1500-MW of electricity from Samalkot before 2014-15. The CEA argues this is because Anil’s Reliance only applied in October 2010 for mandatory clearances to lay power lines from Samalkot and submitted a ‘performance bank guarantee’ too late, in March 2011.

“The implementation of the (Samalkot) transmission system has begun but commissioning will take about 45 months (from June 2011),” reads the CEA report. Still, adds the CEA, Reliance Power might manage to evacuate about 400-MW of electricity from Samalkot in the interim by using a transmission line running from Kalpakkam in Tamil Nadu to the GMR-owned Vemagiri power station in Andhra Pradesh.

“It may be possible to evacuate 400-MW from Samalkot, subject to a daily assessment of the grid’s capacity,” writes the CEA. Samalkot currently generates 220-MW using 190,000 cm/d of D6 gas but Anil Ambani is hectically lobbying for extra 9.6m cm/d D6 gas to fuel the 2400-MW expansion.

Despite the negative CEA report, Ambani has managed to get Samalkot included on a list of power stations expected to be commissioned by March 2012, so it can become eligible for a gas allocation.