Source: Financial Express
Financial Express, reports that the beleaguered Dabhol power plant will start buying natural gas from Reliance Industries from October 1 to cut electricity generation cost at the nation’s largest gas-fired unit.
“Yes, we will start taking (RIL’s) KG-D6 gas from October 1,” said AK Ahuja, managing director of Ratnagiri Gas and Power Pvt Ltd, the company that runs the 2,150-mw power plant and the adjoining LNG receipt facility in Ratnagiri district of Maharasthra. The government has more than doubled RGPPL’s allocation from KG-D6 to 5.67 million standard cubic meters per day that will help generate about 1,000 mw of electricity.
RGPPL was initially allocated 2.7 mmscmd of gas for the period between April and September but the company had not draw even a single unit as it had a running contract with Petronet LNG Ltd to buy imported liquefied natural gas. It paid a burner-tip price of $7.8 per million British thermal unit for the regassified-LNG sourced from Petronet.
“The delivered price of KG-D6 gas will be $6.2 per mmBtu,” Ahuja said. “One dollar per mmBtu reduction in cost of gas will bring down electricity generation tariff by 35 paisa per unit.”
RGPPL currently produces 950 mw of electricity at Rs 4.70 per unit. This will decline to Rs 4.2 per unit with KG-D6 gas. RGPPL was currently generating 950 mw of electricity from three units and by the year end two more units would be made operational that would require an additional 1.6 mmscmd of gas from RIL’s KG-D6 fields. “By March we expect all the units to be operational and that is when we would be able to start drawing our full entitlement of 8.4 mmscmd KG-D6 gas,” he said.
RGPPL’s contract with Petronet will come to an end in September 30 and from the next day it will start taking KG-D6 gas to cut down its fuel cost.
RGPPL co-owned by state power utility NTPC and gas firm GAIL India—was among the three firms which were yet to draw on even a single unit of KG-D6 gas allocation. The others are NTPC, which has not yet signed a gas sales purchase agreement for its entitlement of 2.67 mmscmd, and Essar Power that is negotiating a transportation agreement.