Petro firms in race for 25-year NTPC project
By Praveen Chandran | 27 May 2002
Mumbai: Leading oil and gas companies like British Gas, Shell, Gaz de France and Petronet LNG are in race to bag a 25-year contract to supply liquefied natural gas to the National Thermal Power Corporation (NTPC) for its proposed gas-based power project. All these bidders have submitted the expression of interest and NTPC will soon shortlist the qualified bidders, merchant banking sources close to the development said.
NTPC has chalked out a 4,800-mw capacity addition programme by setting up new greenfield projects in different parts of India. Out of the total 4,800 mw, 1,500 mw will be made by using LNG as fuel. In April 2002, NTPC had invited bids for the supply of 5 million tonnes of LNG per year for a contract period of 25 years.
The 1,500-mw gas-based capacity addition has been proposed through the construction of new projects in Kayamkulam, Kavas, Ghandhar, Anta and Auraiya, the sources said.
Following the selection of the pre-qualified bidders for LNG supply, NTPC will invite financial and technical bids from the potential contenders. The sources said NTPC has decided to retire its high-cost debt worth Rs 1,500 crore by sourcing cheaper funds from the domestic debt market. A senior NTPC official said: “NTPC has already approached the government for retiring the high-cost debt. A favourable reply is expected soon.“
The Rs 1,500-crore repayment will be made to the World Bank's soft-lending arm, IBRD, Japanese Bank for International Cooperation and KfW, the German lending agency. These funds were sourced at a rate of 14-17 per cent earlier.
The fresh borrowings being made to replace the high-cost debt will be a term loan with an average eight-year redemption period and a coupon rate of 10 per cent, an NTPC official said. “NTPC has also sought an equity support of Rs 13,000 crore from the government for building a new capacity during the 10th Plan period. The planning commission has already allowed Rs 5,000 crore to NTPC.“
Last year, NTPC had gathered Rs 6,300 crore from a consortium of banks and Indian financial institutions for completing the projects under construction.