NTPC Ltd.

State-run NTPC Ltd, which has been unsuccessful in securing gas supplies from Nigeria and Yemen, is now turning to Ghana, where it has proposed building a power project in return for liquified natural gas (LNG).  The power project can be gas-based or coal-(based) depending upon the fuel available.

NTPC has a total gas requirement of 16 million standard cubic metre per day and sources some part of its requirement of gas from the spot markets because supplies through long-term contracts are not available on account of global demand for gas exceeding supply. NTPC chairman and managing director R.S. Sharma confirmed the utility’s move saying that the proposal is at discussion stage and has not been firmed up, but NTPC is ready to build power projects for anyone who gives them LNG.

India’s largest power generation utility had earlier signed a memorandum of understanding with the Nigerian government for supply of 3 mtpa of gas a year for NTPC’s projects in India. In return for the gas, NTPC was to build a 700MW gas-fired power plant and a 500MW coal-based plant in Nigeria, and renovate a 200MW unit at a 1,320MW plant. It had also offered to train Nigerian engineers and set up a training institute in the country. The deal has hit the skids after a change of government in Nigeria in 2007.

The company had adopted this approach to try and pre-empt Chinese firms from gaining the upper hand. India and China, both growing economies, need fuel reserves to feed their soaring energy needs. Africa is estimated to have around 10% of the world’s hydrocarbon reserves.