GSPC happy to buy expensive R-LNG for power

Vol 15, PW 21 (03 May 12) Midstream & Downstream

Expensive R-LNG is not preventing GSPC from charging forward with plans to commission gas-fired power projects totalling 1000-MW by the end of this year.

GSPC commissioned a 351.43-MW gas-fired expansion to its 156.1-MW Hazira combined cycle power station on March 23, taking the station’s capacity up to 507.53-MW. GSPC subsidiary and power producer Gujarat State Energy Generation (GSEG), which has run the Hazira station since 2001, is receiving 1.83m cm/d of R-LNG for the expansion, sourced from parent GSPC under a 20-year agreement extended until 2032.

“The gas price is mutually agreed between GSPC and GSEG,” says an industry source. “If GSPC sources term R-LNG it will cost Rs22/cubic metre ($0.41).

But for spot R-LNG the cost will range from Rs35.59 ($0.67) to Rs37/cubic metre ($0.69).” GSEG also has a gas supply agreement with Calgary-based Niko Resources for 800,000 cm/d of domestic gas from the Hazira field, which operator Niko (33.33%) shares with GSPC (66.67%).

But it is receiving less than half its contracted supplies from Niko and is forced to rely on R-LNG to plug the gap. Even more R-LNG will be needed if GSEG adds yet another 542.47-MW at Hazira as planned within the next five years, increasing the station’s total capacity to 1050-MW.

Separately, GSPC Pipavav Power Company, a joint venture between GSPC and state-owned Gujarat Power, is determined to commission two 351-MW gas-fired units by year-end using 3.66m cm/d of R-LNG. State-owned Bharat Heavy Electricals (BHEL) is constructing these units at Kovaya village in the Amreli district in line with an Rs1893cr ($360m) contract it won in March 2008.

GSPC wants the Pipavav power station to eventually have a total 2100-MW electricity generation capacity.

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