NTPC to ink deal with Nigeria for $1.7 bn-gas plant
The firm will build plants in the African country and will also set up a training institute for engineers, reports Utpal Bhaskar.india Updated: Jan 05, 2007 21:37 IST
NTPC Ltd, India's largest power production company, may set aside $1.7 billion to secure assured gas supply for its plants from Nigeria, to ensure the units run at optimal capacity.
The investments are towards financing the development of a liquefied natural gas (LNG) terminal in Nigeria and the setting up of a re-gassification terminal in India.
This will allow for the gas to be converted into liquid for it to be shipped to India and then re-converted into LNG.
As per the deal, NTPC will be getting a three-million-tonnes-per-annum (MTPA) gas block in lieu of it setting up a 700 MW gas-based power plant, a 500 MW coal-based plant and renovation of a 200 MW unit at 1320 MW Egbin plant in the country.
In addition, it will also train 30 Nigerian engineers and set up a training institute for engineers in the country.
"It will take an investment of $1 billion for setting up the liquefaction terminal in Nigeria, and another $700 million for setting up a LNG terminal in India. We may partner with someone for the LNG projects, as we do not have a competency in that area. We may also partner with an existing LNG facility in India and offtake LNG from there," a senior company executive said.
NTPC has already received the draft memorandum of understanding (MoU) from the Nigerian government. The company plans to finalise the deal before the end of this financial year and before the elections are held in the African nation. "We do not want to wait for a change of guard as this may lead to a fresh round of negotiations," the executive said. NTPC will appoint a consultant for the LNG project after the deal is inked.
It has seven power generation plants fuelled by gas or liquid fuel with a commissioned capacity of 3,955-mega watt (MW). The company also has a 740 MW commissioned gas based capacity through a joint venture.
"After investments in gas block, liquefaction, regasification and shipping, the price of gas may work out to be between $3 to $4 per million British thermal unit (mmbtu)," the executive added.
The power generation major will be able to procure gas at a far lower price compared to the spot price of $8 to $10 per mmbtu in the international market.
First Published: Jan 05, 2007 21:37 IST