GDF Suez-AP gas unit to help power firms

Offering some relief to the gas-starved power projects recording about 50% plant load factor (PLF), the Andhra Pradesh government is gearing up to develop a floating storage regasification unit (FSRU) on the east coast.

The state government is likely to sign an agreement with GDF Suez LNG UK Ltd this week for setting up of the facility with an outlay of Rs4,000 crore. The unit to come up at the Kakinada sea port on the east coast would have a capacity of 15 mmscm per day and operational by 2013-end.

The regasification unit would convert liquefied natural gas (LNG) to the gas that can be used by the power units. The state government, through its arm Andhra Pradesh Gas Distribution Corporation (APGDC), would enter into agreement with GDF Suez.

Due to the RLNG, the additional power generation of 3000 mw (72 MU/day) would be available to the state. The average cost would be around Rs6 per unit compared with present RLNG variable cost of around Rs9 per unit.

At present, Natural Gas produced domestically is not adequate to cater to the needs of electricity consumers including the non-priority sectors such as city gas distribution, ceramic and steel industries.

From the Krishna-Godavari D6 fields, an allocation of about 9.5 mmscmd of gas has been made by empowered group of ministers to the independent power producers (IPPs) in Andhra Pradesh to meet 75% of the PLF.

However, at present the gas supply is at about 5 mmscmd making the PLF for the existing gas-based power produced to only about 50%.

Power projects set up various companies including GVK and GMR are said to be operating at that PLF and the uncertainty in gas supplies is making the condition of the units “critical”.

Additionally, around 4000 mw of gas based power plants are already under commissioning stage in the state, which require another 20 mmscmd of natural gas.

According to the state government officials, though there are about three LNG terminals operating on the west coast, there is no such RLNG infrastructure on the east coast.

“This would be a major piece of infrastructure for assuring gas supplies to various segments including power, steel and ceramic,” a government official said.