Petronet LNG, the country’s biggest natural gas importer, is in talks with the Kerala government to set up a gas based power plant with an investment of about INR 3,000 crore. The plant may be set up adjacent to the company’s upcoming regassification terminal at Kochi.

Petronet is investing INR 4,500 crore in setting up the five million tonne terminal at Kochi. This would be the company’s second terminal, after Dahej in Gujarat.

Mr AK Balyan MD and CEO of Petronet LNG said that “The Kerala government wants us to set up a gas-based power plant in the state under a joint venture. We have asked the government to sign a power purchase agreement, so that the anchor load is taken care of. Ideally, it should have a capacity of 750 MW.”

He added the government of Kerala, a power-deficit state, was keen to add capacity. Petronet LNG’s Kochi terminal would be ready by July and operational by the year-end.

Earlier, the company had planned to set up a power plant near its Dahej LNG terminal. However, this has not yet taken off, as the company awaits a firm-purchase commitment from the Gujarat government. Mr Balyan said that “There is a surplus situation in Gujarat, and the state has plants idling in the absence of gas linkages.”

Petronet was also keen to set up a 1,200 MW, gas-based power plant in Gujarat and had signed a memorandum of understanding with the state government. It had acquired 50 hectares for the power project. In 2009, the land was allotted by the state government at an estimated cost of INR 42 crore. However, the company plans to secure firm-purchase commitments for 30 to 35% of the power generated before approaching its board for a decision on the investment. Gujarat currently has 4,000 MW of surplus electricity, and aims to generate 7,000 MW of surplus power by the end of this year.

(Sourced from BS)