New Delhi: In an attempt to secure gas supplies for its fuel-starved power plants in India, state-owned utility NTPC Ltd may enter into an agreement with three Oman-based companies to set up power projects in the Gulf country.
The Oman companies—Bahwan Engineering Co. Llc., or BEC, Al Hassan Engineering Co. SAOG, or AHEC, and Zubair Corp. Llc.—have been scouting for prospective global partners with proven capability and expertise in coal-based power generation. NTPC, India’s largest power generation company, in turn, plans to use their association to secure gas supplies for its plants.
“We are open to partnering (with firms) in Oman, provided we get some liquefied natural gas, or LNG, for our projects here (in India),” said R.S. Sharma, chairman and managing director of NTPC. “Our aim is not only to invest overseas but also get fuel security...West Asia is quite important for us. We will talk to these firms.”
NTPC is one of the largest power-generation utilities in Asia with more than 80% of its installed capacity of 29,344MW being coal-based.
Oman has proven gas reserves of 805 billion cu. m. NTPC’s gas requirement is 17 million cu. m per day, or mcmd, but it can now access only 10.5 mcmd. As it has not been able to buy enough LNG, NTPC is forced to use naptha, which is an alternate fuel, to run its plants.
Questions emailed to BEC, AHEC and Zubair went unanswered.
However, some power sector analysts are not convinced about the efficacy of this plan. “Gas supplies from Oman are extremely tight. The Indian government has tried very hard to secure gas supplies from that country. However, nothing has happened,” said Anish De, chief executive officer at Mercados Asia, an energy consulting firm.
NTPC is seeking supplies for its seven power plants fuelled by gas or liquid fuel with a total capacity of 3,955MW, and for the Ratnagiri Gas and Power Pvt. Ltd, in which it holds 28.33% stake. These are now operating at low capacity utilization and efficiency levels because of fuel shortage. The capacity utilization is 60-65%, while the global average for similar plants is 80-90%.
NTPC’s earlier efforts to secure a contract for gas supply of 3 million tonne a year in lieu of setting up a 700MW gas-based power plant and a 500MW coal-based plant in Nigeria are still uncertain due to a change in government in the African nation, as reported by Mint on 9 February.
This is not the first time NTPC is looking for opportunities in West Asia.
Its earlier efforts targeting investments from West Asia on the back of the power ministry’s initiative to politically and economically engage these countries, as directed by the Prime Minister’s Office, had come a cropper, as reported by Mint on 19 March.
NTPC had a net profit of Rs7,129.30 crore on revenues of Rs37,004.60 crore in the fiscal year to March.