Speech of Mr Murli Deora, Honourable Minister for Petroleum & Natural Gas on the eve of signing of the Memorandum of Understanding between Petronet LNG Limited and Pragati Power Corporation Limited for the supply of Regasified Liquefied Natural Gas for the Power Projects in Delhi


First of all, I would like to congratulate Smt Sheila Dixit for her initiative to enhance infrastructure and power generation to meet the existing power deficit in Delhi, and to make Delhi self-sufficient including the increased power requirement vis-à-vis the prestigious Commonwealth Games in 2010. The capital city of India has been selected to host the Commonwealth Games, and we are all committed for the success of these games to showcase the capabilities of our Country.

Creation of adequate infrastructure and providing power capacities has been a challenging task and in the last five years the Government of Delhi has relentlessly addressed this Core Sector, including privatization of Power Distribution. The capital has witnessed a paradigm shift through her able leadership.

State of Delhi being one of the international destinations needs quality and uninterrupted power supplies to provide better quality of life for the people. Delhi receives power from the Power Plants located in Delhi, the NCR Region, and Northern & Western grids. The current power demand of State is around 4100 MW, and the supplies are around 3400 MW, leaving a deficit of around 700 MW, notwithstanding Delhi’s dependence on Northern & Western Grids for around 1900 MW. This will significantly increase in 2010, when India hosts the Commonwealth Games. In order to contain pollution and emission, top priority has been mandated to use environment friendly fuels like natural gas, which has not only received focused attention of the Ministry of Petroleum & Natural Gas, but also the Hon’ble judiciary vis-à-vis the Power/Fertilizer Sectors, and City Gas Distribution/Automotive Sectors.

The Ministry has placed Piped Natural Gas (PNG) supplies in the A & B Category cities for domestic and transportation sector as a priority area, which would not only reduce pollution significantly, but will also reduce dependence of households on LPG, resulting in reduction in subsidies. The plan is to create pipeline gas supply infrastructure in major cities, which progressively by 2012, is expected to cover 60 cities in the country. To facilitate this as a first step, Ministry of Petroleum & Natural Gas has finalized a Comprehensive Policy to encourage investment in pipeline infrastructure, which in the near future would provide PNG to over 20 million urban households. The major PNG players today namely Mahanagar Gas Limited provides PNG to 2, 75,000 homes, 1, 75,000 vehicles and over 800 commercial establishments. Likewise, Indraprastha Gas Limited provides PNG to 56,000 homes, 1, 26,000 vehicles and 280 commercial establishments. Cities like Surat, Bharuch, Ankleshwar, Hyderabad, Agra, Ahmedabad, etc. are currently providing PNG only to the automotive sector. Much of this requirement for PNG would be met through regasified LNG.

The Ministry of Petroleum and Natural Gas has provided 7.5 MMSCMD of natural gas linkage to the existing power projects currently under operation at Dadri, Faridabad, Prgati Power and IP Power in Delhi and NCR region, but this is not sufficient to meet the existing and future power demand in the State of Delhi and NCR Region.

I may like to mention that Ministry of Petroleum & Natural Gas has made continuous efforts to enhance the availability of natural gas specifically for the Power Sector during the last few years. The Ministry has taken several initiatives to enhance the availability of natural gas in the Country through import of LNG, and also award of exploration blocks under New Exploration Licensing Policy. The draft 11th Plan Report on Petroleum and Natural Gas has also projected demand of 281 MMSCMD by 2011-12, of which 44% will be utilized for the Power Sector.

Petronet LNG Limited was incorporated by the Government of India to import LNG for meeting the ever growing demand of natural gas in the Country. Petronet’s Dahej LNG Terminal is the first LNG Terminal in the South Asia and is currently supplying around 20 MMSCMD of Regasified LNG to the States of Gujarat, M.P., Rajasthan, U.P., Haryana and Delhi which is approximately 20% of the countries total gas supplies, in addition to importing Spot LNG cargoes to meet the increasing demand of the power and fertilizer sectors. To meet this challenge, Petronet has already commenced expansion of the Dahej Terminal from the existing 5 Million Tonnes to 10 Million Tonnes, expandable to 12.5 Million Tonnes. The expansion is scheduled to be commissioned by December, 2008.

I am happy to note that Petronet is signing the MOU with Pragati Power Corporation Limited, to supply around 6 MMSCMD of regasified LNG for meeting the fuel requirements of the existing Pragati Power as well as for the proposed projects at Bawana and Indraprastha.

I am also advised that it will be a privilege for Petronet LNG Limited to also participate financially in the expansion of the Power Plants in Delhi, which needless to mention would extend this relationship to a strategic partnership.