New Delhi: State-run NTPC Ltd, which has been unsuccessful in securing gas supplies from Nigeria and Yemen, is now turning to Ghana, where it has proposed building a power project in return for liquified natural gas (LNG).
“We have proposed a power plant in Ghana and want 2.5 million tonne per annum (mtpa) of liquified natural gas for 25 years. The power project can be gas-based or coal-(based) depending upon the fuel available,” said a senior NTPC executive who did not want to be identified because he is not authorized to speak to the media.
NTPC has a total gas requirement of 16 million standard cubic metre per day and sources some part of its requirement of gas from the spot markets because supplies through long-term contracts are not available on account of global demand for gas exceeding supply.
NTPC chairman and managing director R.S. Sharma confirmed the utility’s move. “The proposal is at discussion stage and (has) not been firmed up. We are ready to build power projects for anyone who gives us LNG,” he said.
India’s largest power generation utility had earlier signed a memorandum of understanding with the Nigerian government for supply of 3 mtpa of gas a year for NTPC’s projects in India. In return for the gas, NTPC was to build a 700MW gas-fired power plant and a 500MW coal-based plant in Nigeria, and renovate a 200MW unit at a 1,320MW plant. It had also offered to train Nigerian engineers and set up a training institute in the country. The deal has hit the skids after a change of government in Nigeria in 2007.
The company had adopted this approach to try and pre-empt Chinese firms from gaining the upper hand. India and China, both growing economies, need fuel reserves to feed their soaring energy needs. Africa is estimated to have around 10% of the world’s hydrocarbon reserves.
NTPC is seeking supplies for seven plants fuelled by gas or liquid fuel with a total capacity of 3,955MW, and its 740MW gas-based plant. All these plants are currently unable to utilize capacity efficiently because of fuel shortages. It has a power generation capacity of 30,144MW, which it plans to increase to 50,000MW by 2012. It is looking for gas blocks overseas but has been unsuccessful till date.
“NTPC should seek government’s help and secure long-term gas supplies through government to government bilateral arrangements as has been the case in Qatar,” said Gokul Chaudhri, partner at audit and consulting firm BMR Advisors. Qatar recently agreed to meet Indian demand for supplying LNG on a long-term basis during a visit by petroleum minister Murli Deora to the West Asian nation.