KSEB’s Brahmapuram plant plan hit by rising LNG price

Kerala State Electricity Board’s proposal to set up a 350 to 450 mw natural gas-fired power plant at Brahmapuram has suffered a setback with the landed price of gas in Kochi now hovering around US $24 per mmBtu.

KSEB sources said that though the environmental impact study for the project undertaken by a Hyderabad-based company was under way, the rising price of natural gas had thrown a spanner in the works.

It would not be right to say that the project had been called off, but there was some re-thinking, sources said pointing out that the rising price of gas meant that the price of power from the proposed plant would go up to Rs. 10 or more a unit instead of the earlier projection of Rs. 8 or Rs. 9 per unit.

Pooling of domestic and imported gas is expected to give a balance to the gas price. The Empowered Group of Ministers on Gas Pricing and Allocation, headed by Defence Minister A.K. Antony, is yet to take a decision on the price of gas.

Meanwhile, Petronet LNG’s clients in Kochi have been offered gas from the latest consignment at the rate of 24.35 per mmBtu. Price of gas from the Kochi terminal of PLL has consistently been going up. The terminal was formally inaugurated by Prime Minister Manmohan Singh last week.

Fertilizers and Chemicals Travancore (FACT) bought gas from the first consignment at the rate of US$19.42 per mmBtu. The price then went up to US$21.57 per mmBtu when the second consignment arrived in Kochi.

KSEB sources said that there appeared no other fuel option for the board’s plans though studies on setting up a petroleum coke-based plant were under way. Though petcoke will come cheap, the high price of technology will be the key variable to be factored into the project’s final cost.

KSEB has 17 acres of land at Brahmapuram that has been identified to house the proposed natural gas-based power plant. The project cost is expected to be in the range of Rs. four crore per mw.

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