Kayamkulam is a 'hopeless case', admits NTPC

Vol 17, PW 19 (08 May 14) Midstream & Downstream

Petronet-LNG and Linde India were among firms who sent in EoIs to NTPC on May 7 to supply 1.75m cm/d of R-LNG to its 350-MW Kayamkulam power station in Kerala.

But a senior NTPC source remains pessimistic about whether his company can source affordable gas for the stranded station. "We don't have much hope,” he admits.

"Kayamkulam is a hopeless case. It’s technically challenging to arrange R-LNG for the power station.

" Price, as expected, is the main problem. Kayamkulam needs gas at less than $10/mmbtu to generate electricity at Rs4/unit or Rs5/unit.

"If we can't get gas at an affordable price then we will let the station stay idle or continue to use naphtha," we hear. But a Petronet-LNG source says NTPC is currently buying naphtha at prices equivalent to around $23/mmbtu.

“Why can’t they buy R-LNG at $18/mmbtu” he asks. He suggests the best way to supply Kayamkulam is to transport LNG to the coastal town by boat from the Kochi LNG terminal.

NTPC could build a 50,000-tonne regasification unit at Kayamkulam to convert this LNG to R-LNG. A Linde source suggests LNG can also by supplied by truck.

"Supplying 1.75m cm/d will need 70 truckloads daily," he says. "If that’s not feasible, we could at least supply enough LNG to run the power plant at 30% or 40% capacity.

This would be a much better option than idling the station.”