Lanco diverts gas

Vol 15, PW 6 (22 Sep 11) News in Brief

First it was Bangalore-based GMR Group, now it is Lanco Infratech.

With no new D6 gas allocations on the horizon, power producers are ‘diverting’ their D6 gas supplies to commission new projects. Earlier this month, India’s power ministry wrote to the oil ministry on Lanco’s behalf, asking for permission to divert 1.46m cm/d of D6 gas it is currently receiving at the 734-MW Kondapalli station in Andhra Pradesh to commission a 770-MW expansion.

At present Kondapalli is receiving 1.5m cm/d from ONGC’s KG basin gasfields and Cairn’s Ravva field and only 1.46m cm/d of D6 gas, against its original allocation of 1.75m cm/d made in August 2009. For the proposed 770-MW expansion, Lanco needs an additional 3.08m cm/d.

“We have no choice but to divert D6 supplies,” says a Lanco source. “We can’t use R-LNG because the cost is too high.

” He explains every unit of power produced using domestic gas costs Rs1.40 ($0.03) against Rs5.70 ($0.11) using R-LNG.