Lanco Kondapalli expects FY10 sales double from RIL gas sale

Lanco Kondapalli Power Pvt Ltd, a subsidiary of Lanco Infratech Ltd, expects its revenues to double in 2009-10 (Apr-Mar) on gas supply from Reliance Industries Ltd's deepwater D6 Block in Krishna-Godavari Basin, Chief Financial Officer Suresh Kumar told NewsWire18 today. "Reliance gas from KG Basin will help us to double Kondapalli Power revenues in 2009-10 fiscal," he said without giving financial details. On Friday, Bombay High Court vacated a stay on gas sale from KG Basin to third parties.

The court had restrained RIL from selling D6 gas to third parties after the Mukesh Ambani-owned company was challenged by his brother Anil Ambani's company Reliance Natural Resources Ltd. "We are getting gas from ONGC for Kondapalli phase-I. But still there is some shortage. Reliance gas may help us to meet this shortage," Kumar said.Lanco Kondapalli Power has developed 368.14MW gas-based power at Kondapalli in Vijaywada, which is currently operating on gas supplied by Oil and Natural Gas Corp.

A petroleum ministry official had said the gas sale purchase agreements between RIL and prospective purchasers were likely to be finalised by end of next month, and production from KG Basin was expected by end-February or early March.

"KG Basin gas will be helpful for 366MW Kondapalli phase-II. Works are at an advanced stage, and gas turbine will be ready for commissioning by second quarter (Jul-Sep) of FY10," Kumar said.

Lanco Kondapalli Power has obtained Environmental Clearance from the Ministry of Environment and Forests, to set up 1,155MW power generation capacity.

The 366MW phase-II will be the first module of the proposed 1,155MW capacity expansion and depending on availability of gas, the company will enhance the capacity in a phased manner, he said.

Kumar said the two Kondapalli units will need at least 350,000 standard cubic meter gas supply per day from KG Basin.At 3:10PM, Lanco Infratech shares were traded at 113.75 rupees on National Stock Exchange, down 0.22% from Friday's close.