Mumbai: Petronet LNG Ltd plans to set up a 1,200 MW gas-based power plant at its Dahej-based gas terminal in Gujarat, and would also collaborate with oil marketing firms for retail foray, a top official said on Friday.
“The gas business and power business normally go in tandem...(It) makes sense because we would not be incurring any transportation costs, there won’t be any VAT applicable,” managing director and chief executive officer A.K. Balyan said.
A power plant that will consume about 10% of its own gas capacities of 10 million tonnes per annum at Dahej will be set up in 28-30 months on receiving the board approval, he told reporters on the sidelines of ITF power conference.
He expects the board to approve the plans in a couple of months, while about 50 hectares of land has already been acquired for the project.
Gas-based power projects require investments of about 35 million rupees per MW, while the company will fund the plant by a combination of internal accruals and debt, he said.
Its some of the capacities would be reserved for merchant power sale, he said, but did not give the percentage.
At present, Petronet LNG powers its own operations in Dahej with a captive power plant of about 25 MW capacity,Balyan said.
Its second gas plant at Kochi will be commissioned in 2012, he said.
While it also wants to shore up its business by venturing into gas retailing, it is looking forward to collaborate with retailers.
“We do not have wherewithal, manpower, expertise for retailing right now, that’s why we have to collaborate with our promoters like GAIL, BPCL and IOC,” Balyan said.
State-run firms Bharat Petroleum Corp, GAIL, Indian 0Oil Corp, Oil and Natural Gas Corp each hold 12.5% stake in Petronet LNG.
Shares of Petronet ended down 0.7% to Rs114.05, while the benchmark slipped 0.32%.