NTPC Ltd has complained to the Union government on the shortage of natural gas following the refusal of Petronet LNG Ltd to supply regassified liquefied natural gas.
Petronet LNG’s refusal to offer spot regassified liquefied natural gas prompts move
NEW DELHI: NTPC Ltd has complained to the Union government on the shortage of natural gas following the refusal of Petronet LNG Ltd (PLL) to supply regassified liquefied natural gas (RLNG) after buying from the international spot market.
NTPC has now sought 7 million standard cubic metres a day (mmscmd) of domestic natural gas from the privately operated Panna, Mukta and Tapti fields in order to feed its power plants in Gujarat.
The ministry of petroleum has recently taken away the gas marketing rights for the entire PMT production from operators BG, Reliance Industries Ltd and Oil and Natural Gas Corporation (ONGC) and given it to its nominee GAIL India.
Sources said NTPC had been buying spot RLNG (gas cargoes not part of long-term arrangements) since June 2006 to meet the shortage in domestic gas supply even at high delivered rates of $11.5-17 per million British thermal unit (mBtu).
However, lately, GAIL, IOC and BPCL , which market LNG gassified at Petronet LNG Ltd’s Dahej terminal, have refused to supply spot gas.
A senior executive in one of these companies told DNA Money, “We do not have capacity to regassify LNG from spot market since our excess capacity of 1.5 million tonne is committed to Ratnagiri Gas and Power Ltd (RGPL, earlier known as the Dabhol Power Company).”
Importantly, the PLL terminal can process one additional cargo every alternate month, but the executive said they did not want to spoil the gas market. “Just for half-a-cargo a month, we do not want to vitiate the market, since we are simultaneously negotiating long-term gas contracts.”
Spot cargoes after value added tax and customs duty cost about $16-17 per mBtu.
“Companies with whom we are negotiating long-term contracts may quote the prices to say that the Indian market is absorbing gas at such rates,” said the executive.
NTPC, though, has conveyed to the power ministry that its customers were willing to pay a higher price since even at such high rates, gas worked out to be cheaper than liquid fuels.
The executive pointed out that even the Shell-operated Hazira LNG terminal was not buying spot cargoes at high rates.
This has led to a situation where NTPC power plants are operating at 900 MW lower capacity due to a gas shortage of around 7 mmscmd. The additional gas is needed for operation at 90% plant load factor.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}