Andhra Pradesh IPPs have signed an agreement with GAIL and RIL to ensure additional gas supply to the state's power projects.
An agreement was signed in New Delhi between GAIL, RIL, RGTIL and the power plants in Andhra Pradesh, on Thursday, to ensure additional gas supply to the power projects in state.
This will enable an additional power production of 600 MW (12 million units per day), which is critical for Andhra Pradesh in the upcoming summer months.
The scheme of the swapping arrangement was discussed between officials from the Government of Andhra Pradesh, GAIL, RIL and RGTIL.
It involved detailed contractual agreements on account of regulations regarding the transportation and varying taxation rules in various states.
GAIL, RIL, RGTIL and the power plants in Andhra Pradesh have signed contractual agreements to implement the swapping arrangement. The agreement would enable the supply of an additional 2.594 mmscmd of gas to the power plants located in the state. This, in turn, would lead to an additional power production of 600 MW.
This additional energy would energize 29 lakh pump sets during the summer months, and would help farmers to save their standing crop. Electricity generation through gas would result in savings of approximately Rs. 250 crores by the state, as compared to generation through Naphtha.
All the existing gas-based power plants in the state have been given KG D6 gas to enable their operations at 75% plant load factor (PLF) as against 70% PLF of the power plants outside Andhra Pradesh.
13 existing gas-based power plants in the state have been allocated 9.64 mmscmd of KG D6 gas, which has led to an additional power generation of around 2000 MW.
4 power plants, which had been stranded due to lack of gas, have become operational after the commencement of KG D6 production.
The state government had earlier communicated that the power plants in Andhra Pradesh were suffering certain deficit of natural gas for optimum power generation. It said that the state needs to increase power generation from its gas-based IPPs to meet the energy demand till May 2011, and suggested that re-gasified liquefied natural gas (RLNG) should be used for the same.
However, Andhra Pradesh does not have connectivity to a Liquefied Natural Gas (LNG) plant.
Further, the RLNG from LNG plants located in Gujarat cannot flow from west to east, as against the KG D6 gas flow which is from east to west. Swapping of RLNG with GAIL's KG D6 allocation has been considered.
This involves diversion of KG D6 gas from GAIL's LPG plants to IPPs in Andhra Pradesh, and compensation of an equivalent quantity of RLNG procured by IPPs through GAIL.
Besides the cost of RLNG, AP DISCOMs are willing to pay the requisite costs, including the marketing margin, transportation charges and the inter-state and intra-state taxes, on account of the proposed swapping.
Apart from ensuring an additional supply of gas to customers in Andhra Pradesh, this arrangement will also form the basis for supplying RLNG to other areas in the country that are not connected to LNG units.
The country presently has a re-gasification capacity of 10 mmtpa. The proposed LNG terminal at Dabhol is about to be commissioned, and the Kochi terminal will be ready by the next year.
In this scenario, it is critical that the customer base of RLNG in the country is increased. Also, the supply of RLNG to customers who are physically not connected to LNG terminals becomes important.
Courtesy: INN