Sravanthi in talks with GAIL and BPCL for R-LNG

Vol 16, PW 6 (04 Oct 12) Midstream & Downstream

Gurgaon-based Sravanthi Energy is in talks with GAIL and BPCL to source 840,000 cm/d R-LNG to fire its newly-constructed 225-MW power station at Kashipur in Uttarakhand.

Promoted by former Lanco Infratech joint managing director DV Rao, Sravanthi is one of eight disappointed companies that in August 2011 was promised D6 gas which never came. In January this year it completed Phase-I construction of a 450-MW power station complex in Kashipur, one of the biggest industrial town in Uttarakhand, home to household brands Surya Roshni, India Glycols, Prakash Industries and Videocon.

But Sravanthi’s new power station is lying idle because it can’t source gas. Over the past six months Sravanthi has begun talking to GAIL and BPCL to see if either could source R-LNG from RasGas in Qatar.

“Whoever offers us the best price will get the contract,” Sravanthi tells PETROWATCH. “Next year the domestic gas situation should improve so we are looking for a one-year term contract only.

” Any agreement for more than a year, adds Sravanthi, “would not be logical.” Sravanthi is confident it can secure agreement to buy R-LNG for anything between $11 and $12/mmbtu at the ‘burner tip’ of its Rs1000cr ($200m) Phase-I and Phase-II power stations totalling 450-MW.

But it wants to commission the 225-MW Phase-I in three months if a R-LNG sourcing agreement can be signed. Sravanthi’s precarious position has forced it to go slow on construction of the second (225-MW) Phase-II of its power station, also in Kashipur.

“But if we get R-LNG,” adds Sravanthi, “we will speed up Phase-II construction and complete it in another six months.” For Phase-II, Sravanthi would need another 840,000 cm/d, making a total gas requirement of 1.68m cm/d.