Bses In Talks With Unocal, Enron For Palghar Gas

BSES is negotiating with the US-based Unocal and Enron for tying up gas supply for its proposed 495-mw, liquefied natural gas-based, plant at Palghar in Maharashtra. The discussions with Enron have been on for atleast six months. The companys negotiations with Unocal are, however, at a preliminary stage. Unocal first approached us in late 1997 and Tata Consultancy Services approached us earlier this week on behalf of Unocal. We have stated that we are open to tying up with them as well, said S S Dua, director, BSES.

BSES has not broken off negotiations with Enron although it has run into difficulty. The two sides are unable to agree on the duration of the gas supply agreement as well as the quantify required, Dua added. He, however, declined to give further details.

The Enron spokesperson, however, denied that the negotiations had encounted a block. The discussions are going very well and we hope to finalise the agreement very soon. We are confident that we are in the best position to fulfil their LNG requirements by the targeted date, the spokesperson added.

BSES has been working on the Palghar project for about two years. Company officials say the project was initially conceived as a naphtha-powered project. This was in keeping with the then prevailing craze for naphtha. The company has now decided that although initially the plant may be naphtha-fired, later on the it could be duel-fired (gas plus naphtha) or completely LNG-fired. The Maharashtra government has set up a committee to study the power requirements of Mumbai. The state government will give the final nod to the Palghar project based on this.

The Enron-promoted Dabhol Power Company(DPC) is setting up a 2450-mw Dabhol Power project in Maharashtra. The 826-mw first phase of the project will use naphtha as fuel. Once the second phase is fully operational, the entire facility will be converted into a natural gas-fired one. The firm is setting up a LNG terminal at Dabhol to import and store the gas. Excess gas will be sold to other parties as well through a pipeline network. Unocal, too, is planning to supply natural gas from its plants in Bangladesh and Myanmar. Unocal India, its Indian arm, is planning to lay pipelines here to supply gas.