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GAIL May Set Up 2 Gas-Based Power Plants in MP, UP

  • Sources said that the power plant in Vijaipur will be of 300 megawatt, while the one in Dibiyapur will be about 350 megawatt. Sources also said that GAIL may be looking to invest somewhere between Rs 2,000 and 2500 crore to set up the two plants. The plan is basically to rationalize the cost of producing LPG and natural gas as the company already has two LPG recovery units in these locations.

  • GAIL has been supplying natural gas to different OMCs like HPCL and BPCL who already have their own retail set-ups. Moreover, even while in its nascent stage, GAIL may have been planning to sell 15% to 20% of the power that it will be producing in these plants on merchant basis. However, sources said that due to acute shortage of domestic gas, the company may be considering re-evaluating this plan.

  • This is because while the initial plan was to make power prices affordable, by planning a fuel mix of domestic and re-liquefied natural gas to the ratio of 60-40, following a drastic fall in the output of KG D6, the company will now have to import the entire requirement. Sources said that this inevitably will be driving the entire cost up by at least 40% to 50%. Currently, gas-based power plants are charging a tariff of Rs 4 to 4.5 per unit and the current import rate of RLNG is around $13 a unit in the global market. However, GAIL is yet to respond to Bloomberg UTV’s email query on this matter.

  • At 9:32, the company's stock was trading at Rs 351, up 0.30% on the BSE.

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