Gas-based power firms hit by lack of clarity on fuel supply

Gas-based independent power producers are in a quandary, as there is no clarity on whether the issue of gas availability will be addressed by the middle of next year or even by 2014 end.

While there were some hopes on a floating re-gasification vessel being installed by the end of the year, this is also likely to be delayed by at least another six months.

It is estimated that about 9000 MW of gas-based plants (investments of about Rs 50,000 crore) are stranded due to inadequate supply of gas. Some of these plants have shut down, some are functioning below 30 per cent and few others are generating power using other costlier fuels.

T. Adi Babu, Chief Operating Officer, Finance, Lanco Infratech, told Business Line that there is no clarity on gas supply even though there were some indications that there could be some supplies coming in by end-2013.

“As per our understanding, there is the possibility of making arrangements for supply of liquefied natural gas. It is unlikely that people are willing to pay high price for power generated from LNG. Even for purchase of power at Rs 4-5 per unit, there are concerns,” he said.

While there have been reports of new gas finds in the Krishna Godavari D6 by Reliance Industries, it is not clear by when this would be available for power generation.

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