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No APM gas for plants

GAS MARKETING major GAIL (India) Ltd, is unsure about supplying Re-gassified Liquid Natural Gas (RLNG) to the three proposed 100 MW power plants at heavily subsidised administrative price mechanism (APM) prices in the Kanpur region.

india Updated: Jun 02, 2006 01:24 IST

GAS MARKETING major GAIL (India) Ltd, is unsure about supplying Re-gassified Liquid Natural Gas (RLNG) to the three proposed 100 MW power plants at heavily subsidised administrative price mechanism (APM) prices in the Kanpur region.

It may be recalled that the Uttar Pradesh Government has plans to set up three gas-fired 100 MW power plants in the Kanpur region during the next two years.

“Supplying RLNG to the proposed power plants at APM prices appears unlikely considering the fact that GAIL is no longer purchasing gas for industrial usage from Oil and Natural Gas Corporation (ONGC)” a senior GAIL official told the Hindustan Times from New Delhi.

The only option for purchasing RLNG for the three power plants could be the gas being imported from Algeria with the current delivered price of US $ 12 per million metric British thermal unit (MMBTU) in Uttar Pradesh. The further hike in the global crude oil prices in future could flare up the RLNG prices as well,” he said.

The official said that the Uttar Pradesh Government must not rely solely on future gas availability at APM prices for the proposed power plants in future and should opt for a dual-fuel mechanism for power generation by using naptha as fuel.

Since naptha prices are also linked to the rise of global crude oil prices currently hovering at US $ 70 per barrel, the Uttar Pradesh government must tie-up its fuel requirements well in advance before even thinking of commissioning the three power plants in the Kanpur region, he added.