India’s gas shortage puts power plants on hold

5 July 2012 (Last Updated July 5th, 2012 18:30)

Maharashtra State Power Generation Company (Mahagenco) in India has halted plans to build a 1,220MW, Rs46bn ($843m) power plant due to the unavailability of gas.

Maharashtra State Power Generation Company (Mahagenco) in India has halted plans to build a 1,220MW, Rs46bn ($843m) power plant due to the unavailability of gas.

Three company sources told Reuters that the company has stopped the bidding for equipment to supply and build the plant due to the shortage which has stranded gas-based power projects which are nearing completion with a combined capacity of around 7,000MW.

Power equipment makers including Bharat Heavy Electricals, Larsen & Toubro and BGR Energy had bid for the contract to design, supply and build the proposed expansion of the project in Uran, western India.

The government could not allocate 5.4m British thermal units (mmBtu) of gas for the project, and the deposit money was subequently returned to the bidders.

Expansion of the plant at Uran was first proposed by Mahagenco in 2004. Due to shortage of the gas, the existing 672MW plant is running at 50%-70% of its designed capacity.

Falling gas output at the Reliance Industries-operated offshore KG basin field has affected the plans of several potential customers.