NEW DELHI, Oct. 13 (UPI) -- The Indian Power Ministry has said it will hold talks with four gas-producing firms to secure gas supplies for the troubled Dabhol power plant.
The ministry took the decision following a recommendation from a group of ministers on Dabhol, which asked the government to immediately hold talks with gas suppliers, including Reliance Industries, Gujarat State Petroleum, British Gas and Oil and Natural Gas Corp.
The group has also asked the government to finalize the price for securing 1.2 million tons per year of liquefied natural gas from Qatar as soon as possible so that the power plant can begin operating from April 2007.
"As the gas price will directly impact the cost of power generated from the plant, it has been decided to simultaneously explore options, including firming up long-term gas supplies from existing domestic players, who have recently announced huge gas discoveries," said an unidentified member of the group after the meeting on Friday.
Another option discussed in the meeting related to averaging the price of liquefied natural gas already sourced by Petronet from Qatar with the price of the 1.2 million tons per annum of liquefied natural gas.
While such averaging may bring down the final price to the Dabhol project from $8 per mmbtu to around $6 per mmbtu, this will also have implications on existing liquefied natural gas users in the power and fertilizer sectors, The Financial Express newspaper reported Friday.
