Kakinada LNG promoters want AP to buy 500-MW

Vol 7, PW 1 (26 Mar 03) Midstream & Downstream

NEVER SAY die! That's the spirit at BP, Petronas, Indian Oil and Kakinada Sea Ports - promoters of the Kakinada LNG import project.

Despite emerging competition from Reliance's recently-hiked but yet to-be-proven 9tcf gas find in the Krishna Godavari deepwater,Kakinada promoters remain confident of the viability of their project and on 7th March made a presentation to the Andhra Pradesh Infrastructure Authority in the state capital Hyderabad. "It was an effort to inform the state authorities of the project and its viability," a source present tells PETROWATCH.

"They (the project promoters) want the state government to guarantee purchase of 500-MW electricity (from the 1,000-MW power station planned with the LNG import project). They want the state government to sign a support agreement for this." Is the state government willing "It may not be possible for us to give such a guarantee.

The state electricity regulator might not let us do this." Another solution beckons: "They (the Kakinada consortium) could sell power to NTPC." Does Andhra feel the Kakinada project is viable "On the face of it the project looks viable but the consortium did not indicate any gas price to us during the presentation. We feel the price (of regassified LNG) could range between $2.5 and $3 per mmbtu." The next meeting of the Andhra Pradesh Infrastructure Authority is on 22nd April.

"The authority will examine if it has any role to play in the project," he adds. "If approval is needed this will happen in another two weeks and the project report will go to the state government."