Crisil wants power cos to blend LNG-gas
Rating firm Crisil has suggested that blending liquefied natural gas (LNG) with gas can be a viable option to make up for the shortfall. These remarks come at a time when shortage of domestic gas production has raised concerns over fuel requirements of upcoming power plants.
In its recent report, Crisil said the current production cannot meet the requirements of the upcoming 8,000-10,000 MW gas-fired power generation capacity plants, which have an investment value of Rs 35,000- 40,000 crore and are expected to come on stream over the next few months.
Since availability of gas has created a challenge for the new plants that will add a substantial 70 per cent to the existing gas-based capacity of 16,000 MW, power producers will now have to explore a mix of domestic gas and LNG to stay afloat, it maintained.
“Power purchase costs of utilities in India have risen over the last few years. This makes LNG a viable blending option for them,” Crisil Risk and Infrastructure Solutions Head (Natural Resources) Singh Chugh said.
According to the report, large power consuming states currently buy 15-20 per cent of their electricity at a variable cost of Rs 2.5 per unit to Rs 4 per unit.
“Power purchase costs have shown a rising trend. Gas- based power plants can match the currently prevailing power purchase costs by blending domestic gas with imported LNG to the extent of 25-30 per cent,” Chugh said.
The projects that proactively tie-up LNG supplies will ensure that they remain financially healthy enough to service their lenders, while the question of domestic gas production sorts itself out.
