NTPC to get LNG in Nigerian swap

AFTER Sri Lanka, NTPC is now set to venture out into the mineral-rich lands of Africa. In a swap deal, the Rs 26,000-crore power company is all set to tie up an agreement with the Nigerian government to set up a 700 mw gas-fired plant in lieu of 3 million tonnes of liquefied natural gas per annum. The agreement is likely to be finalised in the next two months. The power major is also in the initial stages of discussion with the governments of South Africa and Mozambique for access to coal and gas.
The Nigerian government has forwarded a draft memorandum of understanding (MoU) to NTPC, agreeing to allocate NTPC proven onshore gas blocks and gas resources of 3 million tonnes per annum. NTPC would be required to develop these blocks and later set up a liquefaction terminal in Nigeria to export the LNG to its gas-fired stations in India.
The investment proposal is being examined. NTPC officials said that they are awaiting advice from the government. Sources said given the fact that Nigeria is going elections in May 2007, NTPC would like to have the input of the external affairs ministry before it finalises the agreement. Sources said NTPC is looking at this deal not only to source gas for its existing plant but for new plants in India also.
NTPC?s expansion plans in Kawas and Gandhar have been on hold because of gas shortage. The company has had to buy gas from the spot market at $10 per mmbtu to run its gas-based plants. NTPC operates six gas-based plants at Gandhar, Kawas, Anta, Auraiya, Dadri and Faridabad. However, its average plant load factor (PLF) is only around 70% due to non-availability of adequate gas supplies.
As part of its commitments in Nigeria, NTPC would be required to set up a 500 mw coal-based power plant and a 700 mw gas-based project. The gasbased project will be set up in an operating gas field. NTPC will also have to participate in the restoration of the Egbin power station in Nigeria, which was shut after a boiler explosion. NTPC also offered consultancy services and training for performance improvement of existing power plants in Nigeria.
Nigeria has been seeking foreign investment in infrastructure. It is in this context that an NTPC delegation visited Nigeria in May last year. NTPC officials had offered to participate in the country?s power sector on the condition that equivalent or more gas would be provided for its plant in India. The offer was such that if NTPC set up a 1000MW plant in Nigeria, it would be able to source gas for a plant double the size, that is a 2000MW, in India.

Source: The Economic Times, New Delhi
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