RIL drops captive power plant move

Mukesh Ambani-promoted Reliance Industries (RIL) has dropped its plan of setting up a 345-MW gas-based power plant at its Nagothane manufacturing unit. While sources said the move stems from Reliance's plan to cut capital expenditure to tide over the economic slowdown, the company maintained the project was shelved in the light of a directive from an Empowered Group of Minister's (EGoM) about giving priority to existing customers for the supply of gas from the Krishna-Godawari(KG) basin.

A few weeks ago, RIL had cancelled a turnkey contract worth Rs 866 crore for the supply and commissioning of an advanced Frame 9FA gas turbine, given to a joint venture of state-run power equipment supplier Bharat Heavy Electricals (BHEL) and General Electric in January last. "In view of the EGoM decision to prioritise gas allocation to existing consumers under the gas utilisation policy, we had to cancel the setting up of a captive power plant in Nagothane," said a Reliance spokesperson.

The Nagothane manufacturing division of Reliance has ethane and propane gas cracker units and five downstream plants for manufacturing polymers, fibre intermediates and chemicals. The 1,860-acre facility currently has an 85-MW captive power unit, mainly run on naphtha.

Sources said that the company earlier planned to set up an 800 MW combined cycle gas-based power project at an investment of over Rs 3,200 crore to power its future projects in the region, utilising 3.6 million metric standard cubic meter per day (MMSCMD) of gas.

The Ministry of Environment and Forest (MoEF) had granted environment clearance for this project and also given nod for a 2,000-MW gas-based power project at Dronagiri, Navi Mumbai, to power the special economic zone coming in the region. This project is being set up by Urban Energy Generation, a special purpose vehicle of Anand Jain-promoted Jai Corp, which is setting up the SEZ.

Reportedly, Reliance is also planning captive gas-fired power projects at its SEZs in Haryana, Orissa, Maharashtra and a fertiliser plant in Kakinada (Andhra Pradesh), banking on the huge gas reserves in the KG basin. "We have various projects in the planning stage but, as of now, we have not finalised any of them, except the order given for the Nagothane captive unit. All those are only in the blueprint stage,”said a company official.