GMR's Kakinada project to see Rs 400 cr investment
Mahesh Kulkarni / Chennai/ Bangalore Jun 12, 2009, 00:28 IST
Company plans to use natural gas as fuel to run the barge-mounted power project which will be shifted from Mangalore in early 2010.
GMR Energy Ltd, the subsidiary of Bangalore-based infrastructure major, GMR Infrastructure Ltd, has finalised a Rs 400 crore investment plan to relocate and restart its barge-mounted naphtha fired power project from Mangalore on the west coast to Kakinada on the east coast in Andhra Pradesh. The new plant, which will use natural gas as basic fuel, will be operationalised by March 2010.
GMR, which set up India’s first barge-mounted naphta-fired 220-Mw barge-mounted power project at Mangalore in Karnataka in 2001, had decided to relocate the plant after its power purchase agreement (PPA) with Karnataka government ended in June 2008. The company wants to make use of the enormous quantity of gas available from Krishna-Godavari Basin to run its plant. Raaj Kumar, chief executive officer, GMR Energy said, “There is plenty of gas available and we have been allocated gas from Reliance’s KG Basin for our requirement. We will require one million cubic metre gas per day to run the plant.”
The company is operating the plant at Mangalore on a merchant basis and supplying power to the state grid at Rs 5.50 per unit. The barge will be sailed off to Kakinada through the sea route in February 2010 and within one month start generating power, he told Business Standard.
Raaj Kumar said the company has acquired around 50 acres land at Kakinada, where it has already started the civil work. The works involve erection of transmission lines from the project site among other things. The company has not entered into any PPA with Andhra Pradesh government and the entire power generated from the new location will be sold on merchant basis through the power exchange company floated by GMR Infrastructure, he said.
“At current prices of natural gas, which are ruling in the range of $6 per one million British Thermal Units, the cost of producing power using gas works out at Rs 2-2.20 per unit. After adding both variable and fixed costs the cost could work out to Rs 3-3.5 per unit for us,” Raaj Kumar said.
Raaj Kumar said the company will continue to keep its immovable assets on the land at Mangalore even after shifting the barge and use them for a similar project in the future. "We are hopeful that Mangalore will get natural gas by 2012-13 and once it is available, we will return to Mangalore with revive our barge-mounted power project," he said.
In addition to relocation of existing barge-mounted power project, GMR Energy is also studying possibilities of setting up more such projects in the country, he added.
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