Power Min to approach Cabinet for capping gas price for plants

The Power Ministry will approach the Cabinet for capping the price of 27 MMSCMD gas that will be supplied to the gas-based power plants.

"I am working on a paper to look at the possibility of special dispensation of gas to power projects in the next 10 days and move to the Cabinet," Power Minister Jyotiraditya Scindia said in an interview to CNBC-TV 18.

On being asked about the pricing of gas for the sector, Scindia said: "I am not saying what the figure will be. It can be $4.8/mmbtu or 4.9 mmbtu or 5.5 mmbtu (million British thermal unit) but whatever price the power sector can afford I will take that proposal to the Cabinet."

Currently, it is being provided at $4.2 per mmbtu.

He said the move is aimed at gaining clarity with regard to the pricing of the 27 MMSCMD (million standard cubic metres per day) of gas that is being provided to the power sector at this point in time.

In the last meeting of the Empowered Group of Ministers' headed by Defence Minister A K Antony it was decided that any additional gas produced in the country after meeting the requirement of the agriculture projects would be directed to the power sector.

At present, the fertiliser sector receives 31 MMSCMD of gas from domestic production.

Power projects will get the surplus gas until March 2016, after which the situation will be reviewed again. The decision will benefit projects with a combined capacity of over 7,800 MW.

On the follow-on offer of state-run Power Grid, Scindia said the decision will be taken by the company and the ministry will not meddle with internal capacity need of the company.

The Board of Directors of the company last month approved the FPO proposal to raise 15% of the fresh equity of the existing paid-up share capital.

Meanwhile, the minister also said he is hopes that 155- 160 FSAs (Fuel Supply Agreements) will be signed between the power companies and Coal India by September 13.