NTPC invites bids for 3m t/y LNG

Vol 7, PW 2 (09 Apr 03) Midstream & Downstream

NTPC WILL this week send documents inviting technical bids from companies pre-qualified to supply 3m t/y LNG or natural gas to its four power plants in northern India.

Competition will be intense: Shell, Petronet-LNG, Reliance, Petronas, TotalFinaElf, British Gas, Unocal, Oman LNG and Ras Laffan are all expected to respond in a contest that will be keenly watched by suppliers and consumers alike. BHP Billiton and Unocal are offering overland gas supplies from Iran and Bangladesh but with BHP most likely out of the race (see below) it seems unlikely NTPC will choose a natural gas option, leaving the way clear for LNG.

"The real competition will be between Shell and Petronet-LNG." NTPC tells us. "These are the only two projects on the ground that can match our timetable." NTPC is unconvinced by Reliance's intention to quote an unbeatable 'knock-out' price for its gas from Iran and suspects disagreement between Reliance and BP, its partner at South Pars.

"Reliance needs to get the upper hand over BP to make its plans work," adds a source. "BP sees things differently." NTPC needs extra gas for its Anta, Auriya, Gandhar and Kawas power plants from 2006.

In Kerala meanwhile, NTPC's plan to import 2m t/y LNG for its Kayamkulam power plant proceeds apace. "Request for qualification documents will be issued this month." NTPC is evaluating bids to appoint port and gas consultants.

"The port consultant must prepare feasibility reports for Kochi and Kayamkulam as import terminals. We will invite bids for both locations." NTPC tells us Kochi has more gas customers than Kayamkulam but that an LNG import terminal at Kayamkulam would benefit from "heat integration" with the power station.