The setting up of first LNG terminal on the East Coast at Kakinada Seaports Ltd will help bring down power generation cost by about Rs 4 per unit and LNG by $4 mmBtu (million British thermal unit).
Currently, LNG supplied to power stations through a gas swap arrangement and having to bear State taxes works out to about $12 per mmBtu, against $4.2 per mmBtu supplied to gas plants from the Krishna-Godavari Basin.
The power produced from LNG will be nearly twice the cost of the power generated using natural gas from the KG Basin fields but cheaper compared to power generated now through LNG, naphtha and so on, which ranges between Rs 12 and Rs 12.50 per unit.
FIRST IN EAST
The floating storage re-gassification LNG terminal coming up in tie-up with GDF Suez LNG UK Ltd will be first such on the east coast, while there are three terminals on the west coast.
B.C. Tripathi, Chairman and Managing Director of GAIL Ltd, during his visit to Hyderabad said necessary support infrastructure has to be developed by 2017 when they will have access to supply about 8 million tonnes a year contracted for supply at Henry Hub prices.
As per plans, the proposed floating terminal with an outlay of Rs 1,500 crore will be ready within 18 months (September 2014). Another floating terminal has been planned by Petronet LNG at Gangavaram Port near Visakhapatnam.
The FSRU project will reduce the overheads associated with imported LNG from west coast through swapping mechanism, a Government official said.
The State has nearly 7,000 MW capacity at various stages including 2,500 MW requiring 13 mmscmd, 1,500 MW lying idle and another 3,000 MW ready for commissioning.
The drop in natural gas supplies from the KG fields has adversely impacted the power generation at the gas plants and the consumers.
“Reprioritisation of gas allocation and pooling mechanism could help address the gas supply issue,” according to T. Adibabu, COO, Finance, Lanco Infratech.