Date:16/03/2004 URL: http://www.thehindubusinessline.com/2004/03/16/stories/2004031602320300.htm

Back REL to call for gas supply bids for UP power project

Our Bureau

Mumbai , March 15

RELIANCE Energy has decided to buy natural gas for its proposed 3,500 MW power plant at Dadri, Uttar Pradesh by calling for international competitive bids.

"Despite large in-house natural gas reserves in the Reliance Group, REL has decided to tender for gas supplies to procure gas from the least cost supplier," a source close to the company said. The company is eyeing gas supplies from LNG terminals being built along the western cost.

Reliance E-Gen Private Ltd, special purpose generation company set up by REL to implement the 3,500 MW combined cycle power plant, is expected to call for bids this week. The company plans to call for supply of 17 to 18 million cubic metres of gas per day. This gas demand is expected to continue for 20 years.

Mr Anil Ambani, Vice-Chairman and Managing Director, Reliance Group had earlier said the project would produce gas at Rs 2 per unit and would use gas from Reliance's Krishna-Godavari basin gas find.

"In a gas-based plant the rationale to go for competitive bids stems from the fact that in gas-based power generation, gas forms 60 per cent of the power cost. This is the main reason for Reliance's decision to call for bids," the source said.