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Home News Power Sector News NTPC uses more Naphtha for power generation

NTPC uses more Naphtha for power generation

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Kayamkulam NTPC Power project based on NaphtaNational Thermal Power Corporation (NTPC Ltd) says it has generated more power in its gas-based power plants by increasing the use of naphtha, which is cheaper, in place of liquefied natural gas, (LNG) as global demand and prices slid amid the economic slowdown. But sustained use of naphtha would result in high maintenance costs at NTPC plants and reduce their longevity, said the state-owned utility, which boosted the efficiency of its gas-based power projects by 46% through increased use of naphtha.

“Our aim is to generate power at the cheapest price, with the ultimate beneficiary being the consumer. However, naphtha use will

lead to an increase in maintenance costs,” said R.S. Sharma, chairman and managing director.While NTPC used to buy 1,500kl of naphtha per day when its plants were operating at 50% efficiency in June this year, it is currently buying 3,300kl of naphtha a day to raise the efficiency of its gas-based plants to 73%.“The way crude oil prices have dropped, naphtha prices have also dipped and are expected to come down to 2002-03 levels. This has put pressure on LNG prices,” Sharma said.

NTPC’s total gas requirement is 17 million standard cu. m per day (mscmd) for its gas-based capacity of 3,955MW. Besides, it also has a 1,480MW gas-based power plant through a joint venture.With Nymex crude oil prices coming down to $55.40 (Rs2,767) per barrel from a high $145.31 per barrel on 3 July this year, both LNG and naphtha prices have also declined from a high of $21 per million British thermal units (mBtu) and $28 per mBtu to $15 per mBtu and $9.5-10 per mBtu, respectively.

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While gas is homogeneous, naphtha has small liquid particles. At the time of burning, it increases the temperature to more than 1,100 degrees Celsius. This leads to heat spots that affect the life of the plant. As a result, a plant running on naphtha needs annual overhauling compared with those using gas that need to be overhauled every five years.

India imports 3 million tonnes per annum of gas bought in spot markets, which is sourced by Petronet LNG Ltd and Shell India Pvt. Ltd. LNG is transported in liquid form by ship and needs to be converted into gas before it is used. Indian companies have been unsuccessful in securing LNG supplies in the international market because of increased international demand, particularly from Japan on account of lower nuclear power generation in that country.

With Japan officially declaring a recession, LNG prices are expected to take a further hit. “With the fall in international crude oil prices, it is high time that the Indian companies secure gas supplies. However, long-term LNG supplies have been tied up till 2013,” said U.D. Choubey, chairman of GAIL (India) Ltd.

 

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