Ratnagiri Gas and Power will have to pay an additional $1 per unit for transportation. A senior Ratnagiri Gas and Power official said the cost of production of power would be cheaper by about INR1 a unit as the RIL gas would cost lower than liquefied natural gas.
The agreement will be useful for Ratnagiri Gas and Power as its contract with Petronet LNG, for consumption of liquefied gas, is scheduled to expire by September 2009. The beleaguered power plant needs around 5.6 mmscmd by October 2009 to double its generation capacity to 1,200 megawatt (MW). It will require gas of 8.4 mmscmd to operate the plant at full capacity of 2,150 MW.
RIL has signed agreements to provide 11 mmscmd of gas to power utilities and 15 mmscmd of gas to fertilizer companies. RIL is expected to sign agreements with another half-a-dozen companies for provide of additional seven mmscmd of gas.
“RIL is expected to sign deals with other power firms shortly, which is expected to increase contracted quantity of gas for the power sector to 18 mmscmd,” RIL said. RIL started gas production at its KG basin on April 1, 2009 and aims to produce around 40 mmscmd of gas in September 2009 and 80 mmscmd by December 2009.
