GVK Power & Infrastructure mulls LNG terminal for new capacity - Expands capacity in two other plants, bids for Ultra Mega Power Projects

GVK Power&Infrastructure Ltd, now with a pipeline of 5,000 MW of additional capacity spanning gas, thermal and hydro electric projects, is evaluating the prospect of setting up an LNG terminal as a back up option, which could double up as main gas supply line for some projects.

“While we are certain that the Empowered Group of Ministers (EGoM) will allot us the required additional natural gas supplies for our expansion projects, this move to have our own LNG terminal in the coastal area is aimed at insulating us from gas supply issues,” said Mr G.V.K. Reddy, Chairman of GVKPIL.

Mr Reddy told that the company is taking up expansion of 800 MW at both Jegurapadu unit and Gauthami Power, with an option to increase the capacity further by another 400 MW at each site.

“Even before the gas has been allocated, we are going ahead with this expansion based on the indications. However, this LNG terminal is being considered as it could serve as main supply line based on imported gas,” he said.

“Even if the cost is higher (details are yet to be worked out) compared to gas from the KG Basin gas, we will go ahead with this option as we see the demand supply mismatch in the power sector to continue. These projects will be ready within 30 months from now. Finances have almost been tied up,” he said

CAPACITY ADDITION

“Apart from adding capacity at the existing gas-based project sites, we have applied for expansion of the Goindwal Sahib project by another 1,000 MW. With the recent award of the 700 MW Ratle project and ongoing projects – Goriganga (400 MW), Goindwal Sahib (500 MW) and Alakananda 330 MW, we are heading towards additional capacity of about 5,000 MW within 4-5 years,” he explained.

“The 700 MW Ratle Hydro Electric project on the Chenab is the first public-private partnership (PPP) project awarded by the J&K Government. It is a significant win for the company and adds to the company's portfolio of hydro electric projects. We have recently signed purchase agreement with the J&K utility,” he said.

“Having gained experience in implementing power projects, we are now pitching for the Ultra Mega Power Project (UMPP) bids starting with the one in Chhattisgarh and follow with other projects coming up for competitive bids in Andhra Pradesh and Orissa,” he said.

With regard to some investors keen on acquiring stake in the power business, Mr Reddy said they do not want to divest stake at the special purpose vehicle level.Instead, they prefer to do so at the holding vertical company itself.