GMR’s Vemagiri project to go on stream in Jan

Hyderabad: The GMR Group’s 388-MW Vemagiri project is poised to go on stream in January 2008 with the AP Transco deciding to divert natural gas from Lanco Kondapalli plant.

Located at Vemagiri near Rajahmundry in Andhra Pradesh, the Rs 1,300-crore GMR project was completed in December last and was kept “under preservation” due to lack of gas linkages.

The Chief Executive Officer of GMR Energy, Mr Raaj Kumar, told Business Line that AP Transco has communicated to them and assured to provide 1.12-1.15 million cubic metres of natural gas from GAIL India pipelines.

“Effectively, we would begin the de-preservation process shortly and go on stream from January 2008. The plant has been assured supply till April 2008. While we require 1.6-1.7 million standard cubic metres/day, these supplies would ensure the plant runs at a 65 per cent capacity,” he said.

KG BASIN GAS


Meanwhile, the company is expecting fresh supplies from the KG Basin region where Reliance Industries has announced huge gas find. However, the allocation to the company would depend on the settlement between the Reliance groups as this would have a bearing on gas supply deals, he said.

Asked about the impact of the power plant not performing on the company finances, Mr Kumar said the costs are being carried over. However, with the company running few other plants in the country, this is being partially met with. Its other plants include 200 MW unit in Chennai and 220 MW naphtha unit in Mangalore.

The AP Transco move to divert gas from Lanco Kondapalli to GMR plant is aimed at using all resources for power generation during the ensuing rabi and peak summer months, when the demand shoots up.

Accordingly, AP Transco has decided to allot natural gas to GMR with necessary clearances and expects Lanco to fire its flexible combined cycle plant with naphtha.

When contacted, the Chief Operating Officer of Lanco Kondapalli, Mr Panduranga Rao, said, “it is difficult to understand the decision taken to reallocate natural gas. With naphtha, the cost would go up to over Rs 7 per unit.”