Bangalore: The fate of the State's first gas-based power plant hangs in the balance for want of assured gas suppliers. Karnataka Power Corporation Ltd. (KPCL) is all set to establish the combined gas cycle plant at Bidadi, 32 km from Bangalore. The only catch is that KPCL has not been able to find any supplier of LNG (liquefied natural gas) that is required to run the plant.

Speaking to The Hindu here on Friday, L.V. Nagarajan, managing director of KPCL, said, "It is `Catch 22' situation. The suppliers do not want to get into a forward commitment with regard to supply of gas. There is a lot of demand for LNG in the international market, and the prices are volatile. However, we are sure to settle on suppliers by the end of this year."

He said the plant required 1.5 million tonnes of gas annually. KPCL had written to the Union Government and urged it to nominate an agency to supply LNG to the plant. Though KPCL had floated tenders for gas supply, no agency had quoted a rate, he said.

"It was at this juncture that the M.R. Srinivasan Committee was formed to look into the matter. The committee decided to start a dialogue with the Centre and urge it to nominate agencies to supply gas," he said.

Mr. Nagarajan also said KPCL had begun talks with Gas Authority of India Ltd., Cochin LNG, Reliance Petrochemicals Ltd., Petronet LNG and the Oil and Natural Gas Corporation.

Infrastructure

He said KPCL had so far spent Rs. 120 crore on setting up physical infrastructure for the project in terms of land and pipelines for water supply. He also said gas reserves had been detected off the Andhra Pradesh coast. "We have urged the Union Government to give us a share," he said.

There is another LNG project coming up at Dabhol in Maharashtra. If the suppliers for that project are finalised, KPCL will begin talks for an extension of the supply pipeline to the Bidadi plant. The National Thermal Power Corporation has also proposed to set up a gas-based plant in Kerala.

Mr. Nagarajan said that if KPCL was unable to find suppliers, the plant would be converted into a thermal power plant. "How feasible it will be remains to be seen," he said.

About the plant

The plant would be the largest in the country with a capacity to generate 1,400 MW of power. The cost of the project was estimated at Rs. 4,000 crore. It would have four 350-MW units. It would take at least 28 months to set up a pipeline for the supply of gas and 36 months for setting up machinery. "Both will be taken up simultaneously. With the commissioning of the plant, there will be an assured supply of power to Bangalore and greater grid stability. The plant will set a trend for future gas-based power projects in the State," Mr. Nagarajan said.

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