In an effort to secure gas supplies for its fuel-starved plants in India, NTPC Ltd, India’s largest power generation company plans to set up power projects and a training facility in Yemen.

This is the second country, after Nigeria, where the power company is actively pursuing this model to try and pre-empt the Chinese companies gaining the upper hand. It could also help establish NTPC as an integrated player in the Indian power sector.

“We have been looking at similar opportunities in Africa and West Asia where fuel availability can be leveraged. Our delegation had visited Yemen where they want our technical support. They want our help for both setting up power projects and also training their personnel as there is a huge demand for power," a senior company executive, who did not wish to be identified, said.

NTPC’s Singrauli power plant in Uttar Pradesh. The power major has a generation capacity of 27,404MW at present, which it plans to increase to 50,000MW by 2012

NTPC, acting on a suggestion from the ministry of external affairs, plans to leverage India’s old relationship with Yemen to secure gas resources, estimated at around 4,000 million barrels of oil and gas.

“While the talks for setting up the training facility are in advanced stages, the talks for setting up power projects are in the exploratory stage. We want to develop this exercise on the Nigerian model. We are doing this as we want to pre-empt any Chinese efforts there. A senior government delegation from Yemen will be visiting India in January to work out the modalities," the executive added.

Securing gas supplies would help NTPC as non-availability of fuel for its gas-based projects has meant they are not operating at full capacity. NTPC has seven power plants fuelled by gas or liquid fuel with a total capacity of 3,955MW; it also runs a 740MW gas-based plant under a joint venture.

In Nigeria, the company is planning to finalize a contract for the gas supply of 3 million tonnes per annum (mtpa) in lieu of setting up a 700MW gas-based power plant and a 500MW coal-based plant there. It will also renovate a 200MW unit at an existing 1,320MW plant and train 30 Nigerian engineers. It will also start a training institute for engineers there.

NTPC currently has a power generation capacity of 27,404MW, which it plans to increase to 50,000MW by 2012. Of the 22,596MW it plans to add, 15,180MW will be through coal-based power generation, 4,550MW through gas-based generation and the balance from hydro-power.

“This attempt by NTPC will help in not only securing fuel supplies for its existing projects but also help in future expansion of of the projects as well," said Hitul Gutka, an analyst at Mumbai-based India Infoline Ltd.

The power ministry has admitted that the non-availability of gas and an ongoing court case between NTPC and Reliance Industries Ltd alone affected creation of 1,670MW capacity during the 10th Plan period (2002- 2007).