The State utility welcomed the deal to the extent that it begets cheaper LNG as compared to what has been already agreed with an Australian supplier.NTPC has tied up LNG supplies with Gorgan Projects of Australia for 1.5 million tonnes through Petronet LNG's 2.5-million-tonne-a-year terminal in Kochi.
It is expected to form a special purpose vehicle (SPV) as it takes up the last stage expansion at Kayamkulam in which it would offer the stake to Qatar Petroleum.The current capacity of the Kayamkulam plant is 350 MW, which is being ramped up to 1,050 MW in the next two years and further to 1,800 MW.
The equity deal is expected to help NTPC strike up a long-term fuel supply agreement, reducing its dependence on costlier LNG secured through commercial deals.With uncertainty over gas from Reliance Industries' KG Basin, the deal with Qatar Petroleum could lend some stability to NTPC.
The KG basin has vast gas reserves, but falls short of the requirements of all existing and future projects.KSEB has, however, not been officially informed about the ownership change in the Kayamkulam plant, Mr Namboodiri said.
KEENLY WATCHING
“We are keenly watching the developments, and hope that a formal notification would come from the NTPC,” he added.The power purchase agreement (PPA) has been entered with NTPC as a Central power utility. It remains to be seen how a ‘privatised' NTPC would look at the terms of the PPA.
“For all you know, we could even proceed to withdraw from the agreement should it not suit us in the revised scheme of things,” Mr Namboodiri said when asked what KSEB's options are.But the deal also throws out a window of opportunity in which KSEB could fancy its chances if the new SPV were to dilute its equity, going forward.
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