'Review' puts BSES gas deal with ONGC in jeopardy

Vol 4, PW 4 (29 Mar 00) Midstream & Downstream

Officials at the Bombay Suburban Electricity Supply (BSES) power utility are waiting impatiently for a fresh government clearance for their proposed 495-MW power plant at Palghar near Bombay.

The states previous Shiv Sena-BJP government cleared the project, but the new Congress party government that took charge a few months ago is 'reviewing' it. "It is at a delicate stage," BSES tells Petrowatch, "There are a lot of vested interests against it." He added: "We expect government clearance to come in 15 days (early April)." Worryingly, the ' review' puts in jeopardy an October 1999 agreement with ONGC to buy a portion of the gas needed to fuel the power station.

"ONGC has sent us a draft agreement," learns Petrowatch, "But nothing can move until the government clearance comes in." The Palghar plant needs 2.5m cubic metres a day (cm/d) but has received only 850,000 cm/d clearance from the Gas Linkage Committee, attached to the oil ministry in Delhi. Naphtha or imported LNG is expected to fill the balance.

The gas that ONGC plans to supply BSES is from two gas wells (C22 and C24) on the Bombay Offshore, both of which have been capped. Supply to BSES is expected to last 12 years.

It will be delivered through a150-km ocean-bed pipelines, laid by ONGC. The cost is incorporated into the gas price, which has yet to be agreed.

One official complained that the LNG offered by Enron is "too expensive." BSES has also asked ONGC for an additional 700,000 cm/d for its proposed 225-MW combined cycle power plant at Samalkot, near Kakinada. It is also looking for supplies of naphtha for a 165-MW power plant near Cochi in Kerala.