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Home News Power Sector News NTPC and CIL will sign fuel supply agreement soon

NTPC and CIL will sign fuel supply agreement soon

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CoalThe impasse over signing of fuel supply agreement (FSA) between NTPC and Coal India Ltd has been resolved. The FSA will be signed shortly. Talking to Business Line after the meeting with CIL top brass here, the NTPC Chairman, Mr R.S. Sharma, said that issues pertaining to FSA were “resolved” and both the companies would enter into a formal pact shortly.

Confirming the development, the CIL Chairman, Mr Partha S. Bhattacharyya, said the company was waiting for CEA to complete the allocation of coal to the rest of the power utilities before signing the FSA. CEA has already made the necessary allocations to NTPC, the single largest power producer in the country.

According to available information, the agreed formula has set the “trigger level” (minimum guaranteed supply/off-take) at 90 per cent of the promised supplies by CIL. Violation of the trigger level by either the supplier or the buyer would attract penalty.The actual supplies to power utilities during 2007-08 would be considered as the benchmark quantity for calculating the trigger level.
Increased supplies to NTPC

The NTPC Chairman on Saturday also discussed issues related to coal availability during the next fiscal. The company will source a total of 116 million tonne coal from CIL in 2009-10 up from estimated actual supplies of 114 mt in 2008-09.

NTPC would require an additional supply of 2.5 mt for Farakka and Kahalgaon thermal power plants in 2009-10. To ensure the same, the power major would revamp its merry-go-round system connecting Rajmahal mines under Eastern Coalfields Ltd, a wholly owned subsidiary of CIL.

CIL would also revamp the siding facilities to ensure supply of a total of 12 mt from Rajmahal mines and another three mt from other sources. CIL and NTPC today finalised coal sourcing plans for the upcoming 500 MW thermal power plant of NTPC-SAIL Power Company Private Ltd (NSPCL) at Bhilai. NSPCL is a 50:50 joint venture between NTPC and SAIL.

NSPCL has taken over the 194 MW thermal captive power capacities of SAIL at its steel plants in Durgapur, Rourkela and Bhilai between 2001 and 2002.

The company is commissioning additional two units of 250 MW each at Bhilai. According to SAIL sources, commissioning of the first unit of 250 MW is expected to be over by the first week of April. The second unit is expected to be commissioned by late April or early May.

According to a CIL official, the coal major has agreed to supply 50 per cent of the additional coal requirement of NSPCL from domestic sources. “The residual 50 per cent requirement would be met through imports either directly by NTPC or through CIL,” he said.

According to available information, at 90 per cent plant load factor a 500 MW thermal power facility may require approximately 2.5 mt of coal. Since imported coal has a higher heat value, the total requirement (including imports) of the plant may come down to approximately 2 mt a year.

Source - Hindu businessline


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