Total Weighs Gas-Based Mumbai Power Unit
Total SA, the $34.51 billion French oil major, is considering setting up a gas-based power plant near Mumbai. The French oil and gas conglomerate may either go it alone or rope in Tatas, with whom it has recently signed an agreement for a LNG terminal in Trombay.
Totals proposed power plant is expected to be an extension of the strategic energy partnership with the Tatas.
Our intention is to extend our co-operation with Tatas for gas fired power plants which will have additional power generating capacity, according to Thierry Desmarest, CEO of Total group.
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Though the actual size of the power plant is still under study, it is understood that Total is looking at a minimum generation capacity of 800 mw. Industry sources claim the power plant is in keeping with Totals model of tying imported LNG to power production. They put the cost of setting up a 800 mw power plant anywhere between Rs 2,500 crore and Rs 3,000 crore.
Totals interest in building the power plant is being fuelled by severe demand-supply gap in Maharashtra. We feel that it is interesting to build a new power plant as the state lacks electricity generation capacity, says Desmarest.
The power plant will be based on the imported LNG which will be unloaded at the proposed LNG terminal in Trombay by the 50:50 joint venture of Total and Tata Electric Companies (TEC).
Having power generation capacity of 1,300 mw, TEC is now planning to upgrade all its dual fuel fired power plants for efficient use of gas. It is understood that Tatas will eventually shift all its power plants from coal to gas.
In such a scenario, TECs 1,300 mw power will consume 1.3 million tonne of LNG a year, Desmarest said. The remaining imported gas (LNG parcel) will be offered to industrial customers near the Mumbai hub through network of pipelines. Moreover, it will also fuel the proposed gas plant.
Total intends to annually import 3 million tonne of LNG. The first phase estimated at a cost of $250 million includes setting up LNG hub, storage facilities and network of pipeline in Trombay, Maharashtra.
Besides TEC, Total plans to invest over $500 million in LNG cum power plant with Hindustan Petroleum Corporation Ltd (HPCL) in Andhra Pradesh.
The joint venture has received FIPB approval sometime in February 1997.
It has also signed an agreement for import, storage and marketing of liquefied petroleum gas (LPG) in Vishakapatnam at an estimated cost of $70 million.
The joint venture expects to build underground storage capacity of 60,000 tonne per annum.
Unlike other international oil and gas majors, Total has decided against setting up petroleum refinery in India. It plans to concentrate on upstream petroleum sector and developing infrastructure to import fuels for power plants.
Total has been shortlisted is the Petronet LNG tender for Ennore. Total also plans to seek equity participation in independent power producers (IPPs) as well as be fuel suppliers to them.