| News Room |
| Essar switches over to gas as feedstock at Hazira |
| Economic
Times, Ahmedabad - November 13, 2002 |
Kamlesh Trivedi |
|
Essar Power has switched
over from naphtha to gas as feedstock from Tuesday for
its 515 mw power project in Hazira. The move has reduced
its cost of power by nearly 65 paise per unit.
According
to sources, Essar Power will get 1m cubic metre of gas
from Gujarat Gas, a British Gas group company. Gas received
by Essar Power will go for generation of 200MW of power,
which will be supplied to the Gujarat Electricity Board
(GEB). Out of the total 515MW power generated by Essar
Power, 215MW based on GAIL gas goes for the group's captive
consumption for Essar Steel. From the balance 300MW contracted
with GEB, now 200MW has been converted on gas. So far Essar
Power was supplying 300MW using naphtha as feedstock. |
With the gas supply, Essar
Power has proposed that GEB may continue taking a minimum
of 200MW of power from Essar against the contractual agreement
for 300MW. However, Essar has made it clear that it will
not be able to supply more than 200MW of gas based power.
For any additional need of power of GEB, Essar Power has
said that it would have to switch over to naphtha.
When
contacted by ET, A K Srivastava, md, Essar Power confirmed
that the company has switched over from naphtha to gas,
which will reduce the variable cost for the company. |
According to Mr Srivastava,
the change from naphtha to gas has reduced the variable
cost for the company from Rs 2.4 to Rs 1.7 per unit.
Essar
Power has already reduced its fixed cost by revising the
interest rates on its long term debt. The company has successfully
reduced the interest rates from an average of 19% to 14%
per anum. The reduced fixed cost and now reduced variable
cost has cut down the total cost of power generated by
Essar Power from Rs 3.6 per unit to Rs 3 per unit. |
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