Ongc, Ntpc Form Power Jv

The Oil and Natural Gas Corporation (ONGC) and the National Thermal Power Corporation (NTPC) signed an agreement on Monday for forming a joint venture company to set up a 300 mw combined cycle power plant at Hazira.

The agreement is valid for a year, or, till the formation of the joint venture company, whichever is earlier. The Rs 1,000 crore power project will have the multifuel option and can be operated on naphtha or gas.

The equity of the joint venture company will be equally shared between the two corporations.While NTPC and ONGC will extend full technical support to the joint venture company, the erection, procurement and construction contractor will be selected through competitive bidding. The project will have a 70:30 debt-equity ratio. If one or more parties show interest in joining the joint venture company, the proposal will be considered and approved by both ONGC and NTPC.

ONGC chairman and managing director B C Bora said the joint venture may later consider setting up power plants near small gas fields which might otherwise be unviable to operate. Bora said the corporation would also like to set up a power plant based on its own naphtha once the government removed restrictions on its sales.

Though currently, the corporation is selling its naphtha through the Indian Oil Corporation, the restriction is likely to be lifted in about two years.