Andhra wants R-LNG for new power station

Vol 14, PW 4 (12 Aug 10) Midstream & Downstream

Strange it might sound, but R-LNG suppliers can expect good business from Andhra Pradesh, despite it being the landfall point for D6 gas, and located thousands of kilometres from the nearest LNG terminals in Gujarat.

PETROWATCH learns R-LNG is exactly what Andhra Pradesh-owned power producer APGenco wants for its proposed 700-MW gas-fired power station at Karimnagar in the politically volatile Telengana region. Hunger strikes and suicides by farmers and students in Telengana since last December have revived long-dormant demands for a separate state.

Political expediency has led the Andhra Pradesh government to choose R-LNG for Karimnagar instead of waiting for uncertain domestic gas supplies, as a sop to the disaffected residents of this industrially backward region. Originally, three 700-MW gas-fired units were planned at Karimnagar.

“But due to a domestic gas shortage,” says an APGenco source, “the government directed us to set up just one 700-MW unit fired by R-LNG.” With state cabinet approval in hand, APGenco is preparing to float an EPC tender later this month to construct the power station.

“We want to award the Letter of Intent by October or November,” says our company source, “so the power station can be ready within 30 months.” He adds Karimnagar will need 3.12m cm/d of R-LNG.

Tata Consultancy Services has prepared the Detailed Project Report and established the technical specifications of the estimated Rs3000cr ($650m) power project. “We are in talks with potential R-LNG suppliers,” adds APGenco.

“We could also get R-LNG from the open market. We’re in no hurry.

These supplies are needed after three years. Who knows, by then we may get a domestic gas allocation too!” Gas, domestic or R-LNG, for Karimnagar will be transported through Reliance’s East to West pipeline to a proposed ‘tap-off’ at Shamirpet village, approximately 100-km south of Karimnagar.

“We are talking to GAIL to lay the pipeline,” says APGenco.