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Reliance gas to cut Dabhol power cost to Rs4.2 a unit news
18 September 2009

The unit cost of electricity produced at the beleaguered Dabhol power plant in Ratnagiri, Maharashtra, run by the Ratnagiri Gas and Power Pvt Ltd (RGPPL), will come down to Rs4.2 from the current Rs4.7 after it starts buying natural gas from Reliance Industries from 1 October.

RGPPL will be paying a delivered price of $6.2 per million British thermal unit of gas it receives from Reliance Industries against a burner-tip price of $7.8 mmBtu unit it pays for regassified LNG sourced from Petronet.

"The delivered price of KG-D6 gas would be $6.2 per mmBtu," said A K Ahuja, managing director of Ratnagiri Gas and Power Pvt Ltd, adding, "We will start taking KG-D6 gas from October 1."

"One dollar per mmBtu reduction in cost of gas will bring down electricity generation tariff by 35 paise per unit," Ahuja pointed out.

The government has more than doubled RGPPL's allocation from KG-D6 to 5.67 million standard cubic metres per day and this will help the Dhabol plant to generate about 1,000 MW of electricity.

RGPPL, the nation's largest gas-fired power project, currently produces 950 MW of electricity against its installed capacity of 2150 MW.

The government had, initially allocated 2.7 mmscmd of gas to RGPPL for the April-September period, but the company had not drawn a single unit as it was bound by a running contract with Petronet LNG Ltd for buying imported liquefied natural gas.

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Reliance gas to cut Dabhol power cost to Rs4.2 a unit